What are Some Beneficial Government Policies for Small Home-Based Businesses in India?

. 7 min read
What are Some Beneficial Government Policies for Small Home-Based Businesses in India?

India has recently been described as the world’s only genuinely emerging market at the moment. The growing SME sector of India propels a portion of this development. The Small and medium-sized sector accounts for over 40% of the total GDP and continues to be a vital source of jobs for the increasing population of India. Recognising the significance of Local SMEs in the government has launched several schemes to boost the SME sector.

As a result, India is experiencing a boom in startups in all industries, including IT, service delivery, wellness, technology, and others. The government has launched several schemes to make the process quick in order to enable young entrepreneurs to kickstart startup companies that will ultimately generate job opportunities. The majority of these schemes offer financial aid in the form of subsidies and loans to prospective individuals and organisations.

Beneficial Government Policies for Budding Entrepreneurs

1. Atal Incubation Centre (AIC)

Atal Incubation Centre is a funding scheme that Started in the year 2016. Envisioned by the NITI Aayog, this aims at supporting entrepreneurs by covering their operating costs of capital. The approved business ventures can avail up to Rs. 10 crore over a five-year term.

Atal Incubation Centre allows researchers, students, and startup owners to apply for the scheme across different verticals and sectors. The entrepreneurs can set their company as a Public-private partnership, Public organisations, or as a completely private organisation. The entrepreneur needs to set up space of around 10,000 sq. ft. and should set up the physical infrastructure within six months of disbursement of financial assistance.

2. MSME Business Loans in 59 Minutes

Right now, the MSME Business Loans in 59 Minutes is undoubtedly the most discussed business loan scheme. This program was introduced in the year 2018 by the Government of India. This scheme is introduced to provide financial assistance to micro, small, and medium enterprises. The entrepreneurs can avail of loans of up to one crore under this scheme. This scheme is very quick and, within 59 minutes, you will know about your eligibility. Disbursement of the financial assistance happens within 1-2 weeks. A majority of the public sector banks are a part of this scheme.

3. National Small Industries Corporation Subsidy

NSIC subsidy offers two forms of financial benefits for small businesses: Raw Material Assistance and Marketing Assistance. Raw Material Assistance helps to purchase raw materials from abroad and from India. Marketing Assistance, on the other hand, helps to improve the sales of products and services with an efficient marketing process. The program is introduced to provide loans to SMEs who are looking for growth or rapid expansion.

4. MSME Market Development Program

This development program is designed to provide market expansion assistance to micro, small, and medium enterprises using international events, trade fairs, and roadshows. This system helps in the growth of the business by providing them assistance in terms of expansion into international markets.

Any startup organisation registered under District Industries Centre can apply for this program under which the to and fro travelling expenses will be borne by the government for participating in international exhibitions. Not only that, it bears half of the accommodation charges and ¾ amount of the participation charges.

5. MUDRA Loans

The Government of India initiates MUDRA loans for providing business finance for micro-business units. This program was launched with the single motive of ‘paying the unfunded’. Since most of the time, the small-medium enterprises suffer from lack of funds, the government launches this program to encourage participation and growth of the startups across different sectors like trading, manufacturing, services, etc.

6. Swarojgar Credit Card

Swarojgar Credit Card was initiated to provide loans to small-time businessmen like fishers, homemakers, travel operators, shopkeepers, etc. Under this scheme, the small-time business owners can take a loan of Rs. 25000 in terms of credit card facilities. A passbook is also provided to keep track of the financial transactions. The card will be valid for five years and can be renewed upon satisfactory results from the initial investments.

7. Coir Udyami Yojana

The primary objective of this scheme is to build coir units throughout India. This Coir Board oversees this system which provides financial assistance up to Rs. 10 lakh to eligible units. However, the credit term should not exceed one-quarter of the project value. Individual entrepreneurs, joint ventures, private institutions, the public-private enterprises can avail of benefits under this scheme.

8. Refinancing by NABARD

This program launched by NABARD focuses on providing refinancing to lending institutions in agricultural areas. This aims to provide growth to rural enterprises based in diverse areas. Various handicraft manufacturing industries, rural institutions, agricultural setups have taken part in this scheme and made rapid growth.

9. The Women Entrepreneurship Platform

The Government of India introduced the Woman Entrepreneurship Platform to promote women’s entrepreneurship. The NITI Aayog is the primary driver behind this program and aims to boost the morale of young and dynamic woman entrepreneurs.

This scheme has got three divisions: Gyaan, Iccha, and Karma Shakti. Iccha Shakti aims to empower women to start a company. Gyaan Shakti offers a favourable environment for setting up a business. Whereas, Karma Shakti provides practical help to bussing women entrepreneurs to start their own business or scale them up.

Any form of the organisation - be it NGO, Corporations, and associations - led by women entrepreneurs can apply under this program. This scheme provides several other benefits such as mentoring, credit score improvement, and tie-up with corporate, etc.

10. Stree Shakti Package

The Stree Shakti Package is provided in India by most branches of the State Bank of India (SBI) and focuses on providing women in business with a business loan. The biggest benefit of this startup business loan for women is that loans up to Rs. 5 lakh need no protection.

In addition, some concessions are made by the bank, such as having a reduced interest rate in the event of the loan exceeds Rs. 2 lakh. But the main downside of this loan is that it is only open to women who hold a 51% or greater share in the business.

11. Venture Capital Scheme

This Venture Capital Scheme is a program run by Small Farmers Agribusiness Consortium. This program aims to improve agricultural production. Under this program, the Small Farmers Agribusiness Consortium helps in the development of the agricultural market and improvement in the marketing of agricultural products. The minimum value of the business should be 50 lakhs to become eligible for this program.

12. End to End Energy Efficiency Scheme

The End to End Energy Efficiency scheme was launched in the year 2016. The SIDBI initiates this program in collaboration with the Government of India. Any micro, small, or medium enterprise that is in the business for three years and earning revenue for two years can avail of benefits under this scheme.

However, this scheme is designed to support only energy-efficient units that need to do an energy audit through an auditor affiliated with the Bureau of Energy Efficiency. The startups can also purchase equipment using this line of business finance.

This scheme helps small-medium enterprises to improve their productivity through technological upgrades. Technological upgrades can be attributed to different processes and systems related to the business, such as sales, marketing, delivery module, etc. The Government of India launched the Credit Link Capital Subsidy Scheme to reduce the cost of production for SMEs, thus enabling them to remain competitive in comparison with other players in local and foreign markets.

14. Standup India

The government of India started the Standup India program in the year 2016. It is launched with the sole aim of promoting entrepreneurship and startup cultures in India and is driven by the Small Industries Development Bank of India. The SMEs can avail of loans of up to one crore under this program. This scheme enables you to take a loan of up to 75% of the total project cost.

Conclusion

It is gruesome to start a home-based company and run it for a longer period of time and earn profits. The funding of startups and SMEs mentioned above is intended to reduce the burden of budding entrepreneurs.

You can use this financial assistance for equipment purchase, machinery upgradations, space rental, etc., depending upon your line of business. However, it is necessary to carry out due diligence, homework, and proper study before shortlisting any particular scheme for your business.

Also read:

What Would be a Good Government Policy to Encourage the Growth of Small Businesses?
Start-up Business Model: From Funding To Becoming Brand
How To Become A Successful Entrepreneur?

What is the Difference Between Commerce and Business?

FAQs

Q. What kind of documents are required to apply for the startup India program?

Ans: You need to submit some basic documents like a certificate of incorporation, address proof, PAN card, business profile, and company details to apply for the Startup India program. The application for this scheme can be submitted online.

Q. What kind of organisations can apply for the Startup India scheme?

Ans: The Startup India scheme is eligible for any company which is not more than 10 years old and should not exceed a hundred crore revenue in any of the previous financial years. Any business organisation which is eligible under the above conditions is entitled to get benefits under this scheme.

Q. What is the average time required to get a startup loan?

Ans: The disbursement period for startup loans varies from one institution to another. Normally you can get the necessary financial assistance between 72 hours to 2 weeks of application.