With a population of over 1.3 billion people, 31% of individuals are between the age of 18 and 35. These numbers state that there is no shortage of talent in India. It was the drive and passion of these young individuals that created a need and made India a hub for startups.
With such startups opening new avenues for the millions of unemployed individuals, India has become one of the fastest-growing trillion-dollar economies in the world. Today, India is the fifth-largest economy with a nominal GDP of $2.94 trillion, overtaking the United Kingdom and France.
Looking at these numbers, there’s no denying that India is an emerging market. This makes startups not just beneficial for entrepreneurs but also for the entire economy of the country. It is the Prime Minister, Narendra Modi’s vision to make India a $5 trillion economy and a global economic powerhouse by 2024-25, and startups are proving to be a great contributor to making this vision come true. Hence, the government of India does not only support but has also launched multiple initiatives that promote and accelerate the growth of startups.
If you want to join the bandwagon and launch your startup, here are a few prominent initiatives launched by the government of India that could be beneficial for your venture.
Startup India
One of the first business initiatives launched by the Government of India in August 2015, Startup India, is the brainchild of the Prime Minister, Narendra Modi. The plan for this initiative was created based on the following pillars:
- Simplification and Handholding
- Funding Support and Incentives
- Industry-Academia Partnership and Incubation
According to this initiative, a startup is an entity that was launched less than ten years ago, from the time of the launch of the initiative. Moreover, the entity should have its headquarters in India, with an annual turnover of less than US$14 million (₹100 crores).
The government has already launched multiple schemes under this initiative, like the I-MADE program. Arguably one of the most successful schemes is the Pradhan Mantri Mudra Yojna, a.k.a the MUDRA Bank’s Scheme, under which entrepreneurs from low socio-economic backgrounds were provided with micro-finance and low-interest rate loans.
Pradhan Mantri MUDRA Yojna
To provide funding to micro and small enterprises working in the non-corporate and non-farm sectors, the Government of India formed the Micro Units Development & Refinance Agency Ltd. (MUDRA) institution. MUDRA offers three types of loans known as ‘Shishu’, ‘Kishore’ and ‘Tarun,’ depending on the growth and funding needed by the organization. The loan amounts under each plan are as follows:
- Shishu: covering loans up to ₹50,000
- Kishore: covering loans above ₹50,000 and up to ₹5,00,000
- Tarun: covering loans above ₹5,00,000 and up to ₹10,00,000
MUDRA can be availed by any firm that comes under the Non-Corporate Small Business Segment, which includes, service sector, shopkeepers, vegetable vendors, transport services, food-service unit, repair shops, machine operators, small industries, and others. These companies can be located in rural or urban areas of the country. The main standout point for MUDRA loans is its wide range of loan options, right from ₹5o,000 for solo preeners to ₹10,00,000 for small scale businesses that need to worry about overhead and operational costs.
Stand up India
Standup India is another initiative launched by Narendra Modi on 5th April 2016. Through this scheme, the government aims to support young women and SC & ST communities.
With the help of this scheme, women and SC & ST entrepreneurs can avail bank loans of between ₹10 lakh (US$14,000) and ₹1 crore (US$140,000) to set up their new enterprise, provided it is outside the current farm sector.
Invest in India
For any startup to be successful and achieve its true potential, investment is the key. To promote foreign investment, Invest India was formed in 2009 under section 25 of the Companies Act 1956. The current shareholding pattern of Invest India is 51 % of Industry Associations (i.e., 17% each of FICCI, CII & NASSCOM) and the remaining 49% of Central and 19 State Governments.
Over ten years later, Invest India has been mostly successful, thanks to the efforts taken by the government on FDI policy liberalization, as well as creating a secure and compliant business climate for investors. These efforts have resulted in an unexpected growth of total FDI inflows of USD 64.38 FDI in the year of 2018-19, which is a dramatic increase from 78.6% in the financial year of 2013-14.
Atal Innovation Mission
It’s never too early to start, and the Government of India is encouraging schools to provide valuable information to students, which they can use to become strong entrepreneurs in their life. This is known as the Atal Innovation Mission.
In this instance, the skills to become entrepreneurs do not refer to business or marketing, but cultivating the spirit of curiosity and innovation among these young minds. Hence, the schools provide exposure to science technology, which can help students gain a better understanding of futuristic technology platforms. Under the Atal Innovation Mission, schools have a network, known as Atal Tinkering Laboratories (ATL) set up. The vision of these labs is to cultivate 1 million children in India as Neoteric Innovators. Moreover, this mission also aims to foster and imbibe skills like creativity, design mindset, computational thinking, adaptive learning, physical computing, rapid calculations, and measurements.
Currently, a total of 8878 schools are selected, and 3020 schools have received the ATL grant required to create the structure of the lab.
Make in India
Following the footsteps of Mahatma Gandhi, the Prime Minister launched the Make in India movement in 2014. This movement encourages companies to manufacture and produce their products instead of importing them. Not only did this reduce the cost of development, but it also created a host of opportunities for companies in India. With the help of this movement, all products, right from mobiles and machines, to bullets and tanks were created in the country. Due to this, multiple opportunities were created, wherein big companies started to set shop in India.
Entrepreneurship is a constructive force in economic growth as it acts as the bridge between innovation and market place. To keep growing and thriving as the fastest-growing economy, the government must encourage young minds in their journey to excellence. So, if you are planning to start your venture, take the leap of faith. After all, the country has got your back!
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