How To Get Government Funding For Start-ups In India

Tips and Ideas to get funded in India.

While everyone is claiming that India is changing with its newfound love for entrepreneurship; it is entrepreneurs who are feeling the heat with funds drying up and rising operational costs. But it is also true that starting a business was never this easy like it is now. As the Ministry of Corporate Affairs has rolled out SPICe or form INC 32 from January 2017 where in with a single application, a company can reserve its name, incorporate the organization and can apply for allotment of DIN.  Such initiatives are like a whiff of fresh air in the startup ecosystem of Indian business landscape, yet the pertinent question is and will always be about capital and funds.

Money begets money. With more funds, a business is able to pull more funds. But for a newbie in the business scene, it’s a vicious cycle. Lack of funds means cutting down on operational cost and resources which ultimately tones down the final product or service.

India is thriving destination for angel investors worldwide. Indian startup community boasts of $20 billion worth of venture capital and private equity money. On the other hand, if we see Indian Angel Network – with its odd 450 members; the investment is just around 100 crores and that’s about in 30 -40 enterprise. Which is why, Initiatives from Government of India like SIDBI India Aspiration Fund which is a fund of funds that invests in venture capital funds viz. those which invests at least 50 % of the fund corpus in MSMEs including early stage enterprises. Out of these funding exercises, SIDBI contributes around 10 to 15% of the venture capital fund corpus.

Apart from it, there are so many options that a budding entrepreneur can consider:

  1. PRISM’s Technoprenuer Promotion Programme(TePP)
  • It is a venture of DSIR (Department of Scientific & Industrial Research) that offers grants for individual innovators and budding entrepreneurs to demonstrate proof of concept and/ or prototypes of novel ideas.
  1. Working capital loan
  • It helps startups to meet daily operational costs / to purchase business assets
  • Can be obtained through a letter of credit or direct funding
  1. The Credit Guarantee Fund Scheme for Micro and Small Enterprise
  • Credit facilities in the form of term loans and working capital financing of up to Rs. 100 lakh per borrowing unit
  • The ratio of Government’s investment to SIDBI’s investment remains around 4:1.
  1. Mudra Loan Scheme (Micro Unit Development and Refinance Agency Ltd.)
  • With funding the unfunded as its motto, MUDRA has defined itself as the funding destination of small to medium scale enterprises. It offers low cost funding for Micro Finance Institutes.
  • Funding can be obtained through any Bank, MFI, or NBFC under PMMY (Pradhan Mantri Mudra Yojana) while keeping the lending rates as per RBI guidelines.
  1. Stand-Up India Scheme
  • The flagship funding scheme from Government of India, Stand-Up India Scheme offers composite loan between INR 10 Lakhs and up to INR 1 crore for setting up a new enterprise.
  • Keeping up with cashless and digital bandwagon, the scheme also offers debit card (RuPay) for withdrawal of working capital.
  • With a repayment period of up to 7 years and a comprehensive support for the needs to pertaining pre-loan, facilitation, marketing and operational phase; Stand-Up India Scheme identifies itself in solidarity with entrepreneur community across manufacturing, services or trading sector.

To know more about funding and other government benefits for your business, visit

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