Start-up India and Stand-up India schemes were introduced by the Indian government to boost innovation. These programs are in to create a robust ecosystem for the Startups. The government’s main objective is to generate various opportunities to reduce India’s large scale of employment. It also helps in achieving economic growth.
The contrast between these two programs is that the Startup India scheme promotes new initiatives and ventures. Simultaneously, the Stand Up India Scheme is designed to encourage entrepreneurship among aspiring Women and SC/ST entrepreneurs. Please stand up. India is one of the Start-up India scheme’s main sectors to encourage individuals to bring their ideas to life.
Startup India Scheme
Startup India is an initiative of the Indian government, which works to build up a robust ecosystem that supports startups. To achieve economic growth and generate a large scale of employment opportunities in the country.
The Government of India decided to boost the Startup ecosystem in the country. It helps India become a nation of job creators rather than job seekers. The Prime Minister of India announced the ‘Startup India’ initiative and subsequently launched the Startup India Action Plan on India’s 69th Independence Day celebration on January 16, 2016, in New Delhi. The aim of the government, through this initiative, is to empower the Startups to grow through innovation and design and accelerate the Startup movement’s spreading.
The Startup India scheme has a 19-Point Startup India Action Plan. This plan includes various services like incubation centers, quickly filling the patent, tax exemptions, and ease of business setting. And the massive Rs 10,000 crore corpus fund, and a faster exit mechanism, among various other many more advantages.
The government has initiated services by very Simple process by getting a registered name, low cost of formalities, easy access to a fund out of Rs 10,000 crore corpus. There is no income tax for the first three years. There is no requirement of the government’s prior experience, various R&D facilities, no time-consuming compliances, Tax saving options for investors, and choose your investor.
Highlights of this Scheme
This Scheme provides facilities for the Startups with self-certification compliance with the nine environment and labor laws. It can achieve only through the official mobile application. Startups will be free from any inspection for three years in case of the labor laws. In contrast, random checking will be there for the startups under the environment’s laws.
Startup ecosystem for nurturing talents:
Startup India hub has created a Startup ecosystem for aspiring people to exchange ideas or knowledge. It also offers the benefit that the funding is quite accessible.
Interaction through Mobile App:
The official startup application serves as an easy mode for interacting and connecting with Regulatory Institutions and the Government for queries related to the business. It also allows the stakeholders to exchange necessary information.
Low-cost Patent Examination:
The Start-up India scheme gives the facility that the startups can file the number of designs, trademarks, or patents irrespective of the numbers. The Central Government shall bear the cost. The Startups shall pay the statutory fees. There is an 80 percent rebate for the Startups to file the patents.
This scheme is for the entities registered/incorporated in India that holds the following features:
- It must be less Less than seven years old (from the date of registration/incorporation).
- If an entrepreneur wishes to use this scheme, his/her company should already be a private listed company or as a little liability partnership/ partnership firm.
- The annual turnover should be not more than Rs. 25 crores ( this considers all the financial years since its incorporation/registration).
- The firm should be working in favor of improvement, innovation, or development of services, products, and processes.
- It should have scalability in the business model that can generate employment possibilities and lead to wealth creation.
The various Government benefits and incentive lies in this scheme are:
Providing INR 10,000 crore funding support:
The Government Of India has set up funds amount of funding benefits to INR 10,000 crore’s total corpus. It will invest in startups for over four years. There is no need for direct investment, but India’s security and Exchange Board (SEBI) will sponsor the registered Venture Funds.
Tax Exemption on Government found out Capital Gains:
Start-up India scheme facilitates the startups with an exemption on the financial year’s capital gains. But this is applied only to the capital gains earned through the funds that the Indian government recognized.
Exemption in Tax for three years:
The profits earned by the Startups shall be exempt from the income-tax department up to 3 years since the year of its commencement of business. And the startups are not allowed to distribute a dividend for the listed time.
Stand up India Scheme
This scheme aims to boost the entrepreneurship ideas of the scheduled castes/tribes and women. The Government of India manages the Stand-up India Scheme, Ministry of Finance, and Department of Financial Services (DFS). Stand Up India Scheme promotes bank loans amid 10 lakh and one crore to at least 1 scheduled caste (SC) or Scheduled Tribe (ST) borrower.
There is a condition that at least one woman per bank branch for setting up a greenfield company. This enterprise may be in services, manufacturing, or the trading sector. The non-individual enterprises with at least 51% of the shareholding and controlling stake should be held by either an SC/ST or Woman entrepreneur. SA credit guarantee system will also implement under the scheme through the National Credit Guarantee Trustee Company (NCGTC), which will serve as the operating agency for financial aids.
Eligibility criteria or who can take benefits from Stand up India Scheme:
- Woman and SC/ST entrepreneurs, aging 18 years or above.
- This Scheme grants loans only for greenfield projects (i.e., the beneficiary’s first-time venture in the trading, manufacturing, and services sector).
- The Applicant should neither be a defaulter nor fraud in any financial institution or bank.
There are Details of loan provided under the Stand-up India Scheme, such as :
- Loan size – The loan amount shall cover 75 percent of the overall project’s cost. This condition does not apply to that condition if the borrower’s contribution and convergence support other schemes amounting to 25% of the project’s total expense.
- Security – The loan’s security has a guarantee from the Credit Guarantee Fund Scheme.
- Working Capital – The Working capital amounting to INR 10 lakh shall be sanctioned through an overdraft. The amount over 10 lakh can get approval via the Cash Credit limit.
- Repayment – The Borrower needs to repay the loan within seven years since the grant date. The maximum period of repayment will be eighteen months.
- Margin Money – The borrower needs to bring at least 10 percent of the total project’s cost. Simultaneously, the scheme will envisage and 25 percent margin money in convergence with eligible State Central schemes.
- Rate of Interest – The interest rate (ROI) relies on the project category. It will account for the lowest applicable rate and will not exceed the sum of a 3 percent tenor premium and base rate (MCLR).
Borrowers can easily reach out to any Scheduled Commercial Banks branch to fund their startup through the Stand-up India scheme. They can either visit the department directly or through Lead District Manager ((LDM) or via the Stand-Up India portal.
The primary Documents required for the Standup India loan Application are:
- Identity proof can be PAN Card/Voter’s ID Card / Driving License / Passport.
- Address proof of the business
- Address Proof of residence such as Passport/ Recent electricity bill/telephone bills/voter ID Card of Proprietor or Director’s partner/ property tax receipt
- Company’s Partnership Deed of partners/ Articles of association and Memorandum of association.
- MSME/ SSI registration if necessary.
- Photocopies of title deeds/lease deeds of all the properties offered as collateral and primary securities.
- Proof establishing whether the borrower belongs to the eligible Category (SC/ST/Woman).
- Certificate of incorporation issued by the ROC for establishing whether the majority stake of the holding company is in the name of a person belonging to the Women/ SC/ST category.
How Indian government looks at the scheme?
Keeping the innovation aspect alive, the Indian government bought in the schemes Stand up India and startup India. These schemes support the startup or the upcoming entrepreneurs who are wishing to have a booming business. India’s government wants to give them a ray of hope by providing schemes like stand-up India and startup India.
The government also wishes to explore employment areas for the youth. These platforms can open many employment opportunities, which will also influence the country’s economic growth. Since the schemes were launched a long time back but considering the circumstances caused by Corona Virus Pandemic, these will employ the people who have lost their jobs in this pandemic situation. As well as provide to the economic maturity of the country.
PM Modi also related to the concept that the country would not see any development without giving any platform support for India’s youth. If we want to see the new change and development, we need to provide youth opportunities. The scheme will also let the entrepreneurs directly open their thriving industries.
Our youth will see a positive change in development through both projects. The youth can also showcase their talent by bringing in their business ideas. These schemes will give financial support like debt financing, equity investments, grants, and non-financial support, including incubation, acceleration support, mentoring, and technical experts.
Also Read: Highest Paying Jobs in 2021
Follow us on FACEBOOK, INSTAGRAM, and TWITTER to stay connected.