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.

Startup India Scheme: The Backbone of Startup Growth

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 avail these benefits, startups must complete their Startup India registration and be recognised by DPIIT. 

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 2024, the government has allocated over $2.3 billion (INR 21,276 crore)  in funding through various Startup India schemes and related initiatives.

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’s a curated list of the top government schemes every startup founder should know in 2024:

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:

For Startups:

• Must be DPIIT-recognised, and not older than 2 years at the time of applying.
• Should have a scalable, innovative business idea with market fit.
• Must be tech-based in product, service, model, or methodology.
• Preference to startups in sectors like agriculture, healthcare, education, defence, biotech, etc.
• Should not have received more than ₹10 lakh under any Central/State Govt scheme.
• At least 51% Indian shareholding at the time of application.
• A startup can avail seed support only once.

For Incubators:

• Must be a legal entity, operational for at least 2 years, with a CEO and a capable team.
• Should have minimum 5 physical incubatees and basic infrastructure for at least 25 individuals.
• Must not be distributing seed funds from private third-party sources.
• Should have prior support from the Central or State Government, or meet stricter criteria if not.

Benefits Offered:

• Grants up to ₹20 lakhs for proof of concept, prototype development, or product trials.
• Investment up to ₹50 lakhs via debt or convertible debentures for market entry or scaling.
• Support provided via selected incubators—no need for 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.

 

Latest Update (SISFS): As of December 2024, 213 incubators have been approved under the Startup India Seed Fund Scheme. So far, 2,622 startups have received a total funding of ₹467.75 crore through this scheme to grow their ideas and enter the market.

Source: Press Information Bureau

Please visit the official SISFS website for more information.

SIDBI Fund of Funds Scheme

The SIDBI Fund of Funds Scheme was launched by  the Government of India with a fund of ₹10,000 crore. Its main aim is 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 Alternate 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 (Alternate 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

Latest Update (FFS):

By December 2024, ₹6,886 crore was committed by DPIIT to SIDBI, and ₹11,687 crore was committed by SIDBI to VC funds.

This led to a total investment of ₹21,276 crore in 1,173 startups under the FFS scheme.

Please visit the official FFS website for more information.

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 provides guarantee cover up to a specified limit for loans given by Member Institutions (MIs) to eligible startups. The guarantee can be transaction-based or umbrella-based, with each individual case capped at INR 10 crore or the outstanding loan amount, whichever is lower.

Eligibility Criteria:

For Startups:

• Must be DPIIT-recognised.
• Should not be an NPA (Non-Performing Asset) or in default to any lending institution.
• Must have a sound business model and financial records.

For Lending Institutions:

• Scheduled Commercial Banks
• NBFCs registered with RBI (meeting net worth & rating criteria)
• SEBI-registered Alternative Investment Funds (AIFs)

Benefits Offered:

• Guarantee cover up to ₹10 crore per startup.
• Loans are backed without any collateral.
• 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.

Please visit the official CGSS website for more information.

Latest Update (CGSS): As of January 3, 2025, 260 loans worth ₹604.16 crore were guaranteed to 209 startups under the scheme. Out of this, ₹27.04 crore supported 17 women-led startups.

Pradhan Mantri MUDRA Yojana (PMMY)

Launched on April 8, 2015, the Pradhan Mantri MUDRA Yojana (PMMY) aims to provide loans up to ₹10 lakh to non-corporate, non-farm small and micro enterprises. These loans are termed as MUDRA loans under PMMY and are meant to support income-generating activities such as manufacturing, trading, processing, and services.

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.
• The required loan amount must be ₹10 lakh or less.
• Borrowers must meet the usual terms and conditions of the chosen lending institution.
• Interest rates and lending norms are as per RBI guidelines.

Benefits Offered:

• Easy access to loans up to ₹10 lakh
• Specifically supports small and micro enterprises
• Available across India via a wide network of banks, MFIs, and NBFCs
• Encourages self-employment and entrepreneurship at the grassroots level

To know more about the registration process, please follow the link here.

Latest Update (PMMY): As of March 31, 2025 (FY 2024–2025): Total PMMY Loans Sanctioned: 5,03,89,375 Total Amount Sanctioned: ₹53,0170.18 crore Total Amount Disbursed: ₹51,9170.98 crore

Please visit the official PMMY website for more information.

Startup Accelerator of MeitY for Product Innovation, Development and Growth (SAMRIDH)

Launched by the Ministry of Electronics and Information Technology (MeitY), the SAMRIDH scheme aims to support product-based tech startups in their growth phase by:

• Providing them funding up to ₹40 lakh, and
• Connecting them with customers, investors, mentors, and global opportunities through partnered accelerator programs.

It bridges the funding gap at the growth stage while creating positive social impact through tech-driven solutions.

Eligibility Criteria:

For Accelerators:

• Must have been operational for at least 3 years, supporting 50+ startups (10 of which should have raised private funding), or must have run at least 3 startup cohorts.
• Must operate in India with sufficient infrastructure, mentors, investor network, and cohort-based acceleration experience.

For Startups:

• Should be IT/software product-based startups.
• Must be part of a selected accelerator cohort under SAMRIDH.
• Should be at a stage ready for scaling and investment.

Benefits Offered:

• Up to ₹40 lakh per startup (average ₹30 lakh), with equal co-investment by accelerators/investors.
• Funding is provided through SAFE/Promissory Notes.

Please visit the official SAMRIDH website for more information.

Stand Up India Scheme

The Stand Up India Scheme, launched by the Government of India, aims to promote entrepreneurship among women and SC/ST communities. It facilitates bank loans between ₹10 lakh and ₹1 crore for setting up new enterprises in the manufacturing, services, or trading sectors. The scheme ensures inclusive growth by supporting first-time entrepreneurs from underrepresented groups.

Eligibility Criteria:

• The applicant must be:
  • SC/ST or a woman entrepreneur
  • Aged 18 years or above
     
• The loan must be for setting up a new enterprise.
• In case of non-individual enterprises, 51% of shareholding and controlling stake must be held by either an SC/ST or a woman entrepreneur.
• The borrower should not be in default to any bank or financial institution.

Benefits Offered:

• Composite loan (including term loan and working capital): Between ₹10 lakh to ₹1 crore.
• Interest rate: At bank’s discretion but reasonable and affordable
• Repayment tenure: Up to 7 years with a maximum moratorium period of 18 months
• No collateral required—coverage is under Credit Guarantee Scheme

Please visit the official Stand Up India website for more information.

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

The CGTMSE Scheme, launched by the Ministry of MSME and SIDBI, provides collateral-free credit to Micro and Small Enterprises (MSEs). It encourages banks and financial institutions to lend without the need for third-party guarantees or security, promoting easier access to finance for first-generation and underserved entrepreneurs.

Eligibility Criteria:

• Eligible Borrowers: New and existing Micro and Small Enterprises (MSEs) engaged in manufacturing or services.
• Loans must be extended by Member Lending Institutions (MLIs) such as:
  • Scheduled Commercial Banks
  • Regional Rural Banks (RRBs)
  • Small Finance Banks
  • NBFCs and other eligible financial institutions
• Activities covered: Manufacturing, services, retail trade, and agri-allied sectors.

Benefits Offered:

• Loan Amount Covered: Up to ₹10 crore
• Guarantee Coverage:
   
  • Up to 85% of the sanctioned amount for micro-enterprises (loans up to ₹5 lakh)
  • Up to 80% for MSEs owned by women and units in the aspirational districts
  • Up to 75% for all other eligible MSEs
     
• No collateral or third-party guarantee required
• Both term loans and working capital facilities are eligible 

Latest Update (CGTMSE): The maximum guarantee coverage under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) has been increased from ₹5 crore to ₹10 crore.  This enhancement was announced in the Union Budget 2025 and is effective from April 1, 2025, as per Circular No. 250/2024-25 issued by CGTMSE.

Please visit the official CGTMSE website for more information.

Conclusion

Raising capital is hard. But it doesn’t have to be. India’s government schemes for startups are designed to support your vision. From seed funding to tax breaks, there’s something for every startup as long as you steer clear of common startup compliance mistakes.

So go ahead. Pick your scheme. Apply. Grow.

Your startup journey can take off with a little help from the Startup India Schemes.

FAQs

Q1 . What are the incentives for startups under Startup India Schemes?

Startup India Schemes offer several financial incentives for startups in India, such as:

• Tax exemptions for 3 years
• ₹20 lakh to ₹50 lakh seed funding
• Credit guarantee without collateral
• IPR support and fast-track patent filing
• Easy compliance via self-certification

These benefits help startups grow without being burdened by heavy regulations or funding gaps.

Q2 .What is the ₹20 lakh grant for Startup India?

Under the Startup India Seed Fund Scheme (SISFS), eligible startups can receive up to ₹20 lakhs for product development, proof of concept (PoC), and market validation.

This is a non-equity grant aimed at helping early-stage startups with a Minimum Viable Product (MVP) but lacking funds.

Q3 . How do startups get funding from the government in India?

Startups can get government funding through schemes like:

• Startup India Seed Fund Scheme (SISFS)
• Fund of Funds for Startups (FFS)
• Credit Guarantee Scheme for Startups (CGSS)

They can apply via startupindia.gov.in or through registered incubators.

Q4 . What are the top 10 government schemes for startups in India?

• Startup India Seed Fund Scheme
• Fund of Funds for Startups
• Credit Guarantee Scheme
• MUDRA Loan Scheme
• SAMRIDH Scheme
• Stand Up India Scheme
• The Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
• Atal Innovation Mission
• Aspire Scheme
• North East Startup Scheme

These schemes offer government grants for startups, loans, mentorship, and incubation support.

Q5 . How to raise funds for a startup business in India through government schemes?

To raise funds, first register your startup with DPIIT on the Startup India portal. Then, apply to schemes like SISFS, FFS, or CGSS depending on your stage of growth. Funds may come as grants, equity, or loans via approved incubators, SIDBI, or banks.

Q6 . What are government grants for startups in India?

Government grants for startups are non-repayable financial aids provided to fuel innovation and growth. Examples include the Startup India Seed Fund, Atal Innovation Mission, and SIP-EIT Scheme. These grants reduce financial risk and support development.