Startup India Scheme: Top Government Schemes and Financial Incentives for Entrepreneurs

The Startup India Schemes were introduced to help Indian entrepreneurs scale with government support. But many startups still struggle to access capital and support. This guide covers government schemes, grants, and funding options to fix that. Read on to find the right scheme and kickstart your startup journey with government support.

What is the Startup India Scheme?

The Startup India Scheme, launched by the Government of India in 2016, is a flagship initiative aimed at strengthening the startup ecosystem. It supports entrepreneurs through a comprehensive framework of government schemes for startups, focusing on:

• Simplifying regulatory compliance
• Providing direct and indirect funding for startups in India by government
• Offering tax benefits and exemptions
• Supporting IP protection and fast-tracked patent processing

To access Startup India-specific benefits, eligible businesses must obtain DPIIT recognition. Other schemes, including MUDRA and CGTMSE, follow their own eligibility requirements.

This registration enables startups to operate with greater flexibility, reduced compliance burdens, and easier access to government resources.

Why It Matters to You?

If you're building a startup in India, this scheme could be your launchpad.

As of 31 March 2026, India had more than 2.23 lakh DPIIT-recognised startups, which had created over 23.36 lakh direct jobs. More than 55,200 startups were recognised during FY 2025–26 alone, the highest recorded in a single financial year since the launch of Startup India.

This is not just a policy, it’s a full-fledged ecosystem offering the benefits of Startup India, designed to help you:

• Get recognized and validated by DPIIT
• Access key government funding schemes tailored to different growth stages
• Leverage platforms for networking, mentorship, and scaling

Whether you’re at the idea stage or ready to scale, the Startup India scheme offers you the tools, capital, and backing to grow confidently in the Indian startup landscape.

Let’s now explore the top government schemes for startups in India that can power your entrepreneurial journey.

Top Government Schemes for Startups in India

India’s startup ecosystem is thriving, thanks to a strong push from the government. From funding support to incubation and IP protection, several flagship schemes have been launched to empower startups at every stage.

Here are the major government schemes and financial incentives that startup founders should know about in 2026:

1. Startup India Seed Fund Scheme (SISFS)

The SISFS was launched by the Department for Promotion of Industry and Internal Trade (DPIIT) in April 2021 to tackle the lack of early-stage capital for startups. 

Its aim is to support startups in validating their proof of concept, building prototypes, conducting product trials, entering the market, and pushing towards commercialization.

Eligibility Criteria:

Benefits Offered:

• Grants of up to ₹20 lakh for proof of concept, prototype development, or product trials.
• Investment of up to ₹50 lakh via debt or convertible debentures for market entry or scaling.
• Funding is provided through selected incubators without requiring collateral or personal guarantees.Full incubation support including mentoring, infra access, compliance help, and investor connects.
• No fees charged from the startup for fund disbursement or incubation.

Source: Press Information Bureau

2. SIDBI Fund of Funds Scheme

The original Fund of Funds for Startups, now referred to as FFS 1.0, was launched by the Government of India with a corpus of ₹10,000 crore and is managed by SIDBI. The scheme aims to:

• Increase capital availability for startups
• Encourage private investment
• Boost the overall growth of the Indian startup ecosystem

Instead of investing directly in startups, the scheme provides money to SEBI-registered Alternative Investment Funds (AIFs), also called daughter funds, who then invest in startups.

Eligibility Criteria:

• Startups themselves cannot apply directly to this scheme.
• Only SEBI-registered AIFs (Alternative Investment Funds) are eligible to receive funds from SIDBI under this scheme.

These AIFs then choose and invest in high-potential Indian startups across various sectors and stages.

Benefits Offered:

• Catalyses private investment into startups
• Supports startups indirectly by routing funds through professional investors (AIFs)
• Enables funding across different startup life cycles – from early-stage to growth-stage
• Helps grow venture capital and alternative investment networks in India

3. Credit Guarantee Scheme for Startups (CGSS)

The Government of India launched the Credit Guarantee Scheme for Startups (CGSS) to support DPIIT-recognised startups by offering credit guarantees on loans provided by scheduled commercial banks, NBFCs, and venture debt funds (VDFs) under SEBI-registered AIFs.

The scheme was further expanded by enhancing the extent of guarantee coverage and reducing the annual guarantee fee for lenders in identified sectors.

Eligibility Criteria:

Benefits Offered:

• Guarantee cover of up to ₹20 crore per eligible startup borrower.
• The guarantee helps eligible startups access collateral-free debt through participating lending institutions.
• Two types of guarantee structures:
  • Transaction-based Guarantee: For individual loans
  • Umbrella-based Guarantee: For loan portfolios
• Helps early-stage and growth-stage startups access formal credit more easily.

4. Pradhan Mantri MUDRA Yojana (PMMY)

Launched on 8 April 2015, the Pradhan Mantri MUDRA Yojana provides collateral-free institutional credit of up to ₹20 lakh for non-corporate and non-farm income-generating activities. These MUDRA loans support eligible income-generating activities in manufacturing, processing, trading, services and activities allied to agriculture.

The scheme facilitates easy credit through multiple lending institutions, including:

• Commercial Banks
• Regional Rural Banks (RRBs)
• Small Finance Banks
• Micro Finance Institutions (MFIs)
• Non-Banking Financial Companies (NBFCs)

Eligibility Criteria:

• Any Indian citizen with a viable business plan for a non-farm income-generating activity can apply.
• The business can be in manufacturing, processing, trading, or service sector.
• Interest rates and lending norms are as per RBI guidelines.
• Loans are available under four categories: Shishu, Kishor, Tarun and Tarun Plus. Tarun Plus provides loans above ₹10 lakh and up to ₹20 lakh to entrepreneurs who have previously availed and successfully repaid a Tarun loan. Borrowers must meet the usual terms and conditions of the chosen lending institution.

Benefits Offered:

• Available across India via a wide network of banks, MFIs, and NBFCs
• Encourages self-employment and entrepreneurship at the grassroots level
• Collateral-free institutional credit of up to ₹20 lakh, subject to the applicable loan category and lender requirements.
• Support for small and micro enterprises undertaking eligible income-generating activities

Visit the official MUDRA website for application information and participating lending institutions.

5. SAMRIDH Programme Scale Startup Accelerator of MeitY for Product Innovation, Development and Growth (SAMRIDH)

The SAMRIDH programme was launched by the Ministry of Electronics and Information Technology through MeitY Startup Hub to help promising technology startups move beyond product development and scale their businesses.

Instead of directly funding every startup, SAMRIDH works through selected accelerators that provide:

• Product and business acceleration support
• Connections with customers and investors
• Mentorship from industry experts
• Access to domestic and international markets
• One-to-one matching funding support of up to ₹40 lakh per startup

The programme was designed to support up to 300 technology startups through selected accelerator cohorts.

Who Can Apply for SAMRIDH?

A startup should generally:

• Be a technology or knowledge-based startup
• Have an existing product, proof of concept or minimum viable product
• Demonstrate the potential to scale its operations
• Be ready to raise investment or access growth-stage funding
• Join a cohort operated by a SAMRIDH-selected accelerator

Specific eligibility conditions, sectors and application deadlines may differ between accelerators and individual cohorts.

6. The Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)

The Credit Guarantee Fund Trust for Micro and Small Enterprises was jointly established by the Ministry of MSME and SIDBI to improve institutional credit access for Micro and Small Enterprises.

CGTMSE does not directly provide loans or subsidies. Instead, it gives guarantee cover to eligible Member Lending Institutions against credit facilities sanctioned to qualifying MSEs. This reduces the lender’s risk and helps businesses access credit without providing traditional collateral or third-party guarantees.

Who Is Eligible Under CGTMSE?

Eligible applicants generally include new and existing Micro and Small Enterprises engaged in permitted manufacturing, service or trading activities.

The loan must be sanctioned by a CGTMSE-registered Member Lending Institution, such as an eligible:

• Scheduled commercial bank
• Regional rural bank
• Small finance bank
• Financial institution
• Non-banking financial company

The lending institution assesses the business, sanctions the loan and applies to CGTMSE for guarantee coverage. A business cannot directly obtain a loan from CGTMSE.

Benefits Offered

• Guarantee coverage available for eligible credit facilities of up to ₹10 crore

• Coverage for term loans and working-capital facilities
• Access to credit without conventional collateral or third-party guarantees, subject to scheme conditions
• Availability of a hybrid-security model, under which the unsecured portion of a partly collateralised loan may receive guarantee coverage
• Reduced annual guarantee fees for certain eligible categories

How Much of the Loan Is Guaranteed?

The extent of guarantee coverage depends on the borrower category:

• Up to 90% for eligible women-led enterprises and MSEs promoted by Agniveers
• Up to 85% for eligible SC/ST entrepreneurs, persons with disabilities, MSEs in aspirational districts and ZED-certified MSEs
• Up to 85% for micro-enterprise credit facilities of up to ₹5 lakh
• Generally 75% for other eligible MSE borrowers
• Special coverage may apply to enterprises in the North-East, Jammu and Kashmir, Ladakh and RBI-identified credit-deficient districts

These percentages represent the portion of the lender’s eligible exposure covered by CGTMSE. They do not mean that the borrower receives that percentage as a grant or subsidy.

Important Update: Stand-Up India Scheme Ended

The Stand-Up India Scheme previously facilitated bank loans between ₹10 lakh and ₹1 crore for women and Scheduled Caste or Scheduled Tribe entrepreneurs establishing greenfield businesses.

However, according to the Department of Financial Services, the original Stand-Up India Scheme operated only until 31 March 2025.. Therefore, it should not be treated as an active funding option for new applicants in 2026 unless the government announces an extension or replacement.

The Union Budget 2025–26 proposed a new scheme for five lakh first-time women, SC and ST entrepreneurs, offering term loans of up to ₹2 crore over five years. The proposed programme is expected to incorporate lessons from Stand-Up India. Founders should wait for the government’s operational guidelines before treating it as an available loan scheme.

Conclusion

Government schemes can help startups access seed funding, accelerator support and collateral-free institutional credit. However, each scheme serves a different type of business and has its own eligibility, funding and application requirements.

Before applying, founders should check whether the scheme is currently active, obtain DPIIT or MSME recognition where required and prepare the necessary business and financial documents.

Ready to take the first step towards accessing government schemes and startup benefits? Connect with Startup Movers and let our experts complete your Startup India registration.