How Does Start Up India Scheme Help the Medium and Small Scale Industries?

Start-ups in India witnessed a growth of 108% in total funding from USD 2 billion in 2017 to USD 4.2 billion in 2019 as per records from the National Association of Software and Services Companies. Considering this sector’s growth, it presents an increased potential to create job opportunities – up to 1 Crore jobs in the next 4 to 5 years.

Considering that the MSME sector contributes to 29% of India’s GDP, the government is offering multiple endeavours that could raise this contribution to 50%.

One such endeavour is the Start-Up India scheme that is intended to build a strong economic system to nurture seed enterprises. Add on to this the financial coverage offered via MSME business loan that comes with multiple add-on benefits in the form of convenient access to considerable funding of up to Rs. 30 Lakh.

Subsequently, under this scheme, eligible Micro, Small and Medium Enterprises (MSME full form) can avail multiple benefits, viz. –

Financial benefits

Considering that most of the startups are based on patents, they require a substantial amount to produce their unique goods and services. The registration of patent goods incurs a considerable costing known as patent cost. Under such circumstances, the scheme provides them with 80% rebate on the patent cost. Additionally, the registration process is comparatively faster and involves payment of fees of the facilitator by the government.

Additionally, since MSMEs require significant funding amount to set up their business and ensure its smooth running, multiple NBFCs now offer their MSME loan. Such advances provide borrowers easy access to funding at an attractive rate of interest.

Availing such MSME business loan from reputed lenders like Bajaj Finserv ensures that borrowers can gain access to funding against nominal eligibility criteria and documentation. It helps individuals to start investing in their own startup.

Government tenders

Most of the MSMEs target to avail government tenders since it renders higher payments and larger projects. However, taking into consideration the increased competition to avail these projects, it is challenging to acquire these tenders.

Under this scheme, registered MSMEs can easily receive priority to acquire these tenders and need not have any prior experience for the same.

Income tax benefits

Under Start-Up India scheme, seed industries enjoy income tax benefits. These industries enjoy income tax exemption of 3 years post their incorporation year. All that they need to have is a certificate from an Inter-Ministerial Board. Additionally, with investments in specified funds, MSMEs and SMEs can avail further tax exemption on their capital gains.

High networking opportunities

In an attempt to boost the business exposure of MSMEs at an international and national platform, networking opportunities are also provided. Under this scheme, 2 start-up fests are conducted annually that enables start-ups to meet up with various stakeholders at a specific time and place. It helps businesses in achieving smart growth across their trade front.

Additionally, in an attempt to boost the productivity and competitiveness among MSMEs, Cluster Development Programme has been launched that sets up common facility centres, supports sustainability and growth of MSMEs.

Thus, while a MSME business loan offers MSMEs and SMEs with adequate financial coverage, the Start-Up India scheme brings in multiple benefits to ensure the smooth functioning of the same.


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