India’s startup boom is strongly supported by structured policy initiatives and targeted funding programs. Therefore, understanding the Top 10 Government Grants & Schemes is essential for every Indian entrepreneur. These schemes provide financial backing, regulatory ease, and institutional credibility. Moreover, they operate across central and state levels, supporting diverse sectors. When founders use them strategically, these programs reduce early-stage risks and improve survival rates.
As Rahul Ranjan, Director of Mrig Sight Media, said, “The schemes and grants given by the government are great initiatives for an entrepreneur, especially budding founders aiming for global markets.”
1. Startup India Initiative – Anchor of Innovation
The Startup India Initiative creates a supportive ecosystem for innovation-led and scalable ventures. It simplifies regulatory compliance while improving investor confidence. Eligible startups can claim a three-year income tax holiday under Section 80-IAC. Additionally, they receive fast-track patent and trademark processing with significant fee rebates. The initiative also allows self-certification under labour and environmental laws, which reduces inspections and compliance pressure. Startups gain access to the Startup India Seed Fund through approved incubators.
To qualify, a startup must have DPIIT recognition, turnover below ₹100 crore, and an age under ten years. By late 2025, more than 1.97 lakh startups had received DPIIT recognition. Together, they generated nearly 21 lakh jobs, making Startup India the backbone of India’s innovation ecosystem.
2. Pradhan Mantri Mudra Yojana – Collateral-Free Capital
The Pradhan Mantri Mudra Yojana provides collateral-free loans to micro and small businesses through banks and NBFCs. It primarily benefits first-time entrepreneurs and informal sector founders. Under the Shishu category, businesses can access loans up to ₹50,000 for working capital. The Kishor category offers loans ranging from ₹50,000 to ₹5 lakh for expanding enterprises. The Tarun category supports established units with loans between ₹5 lakh and ₹10 lakh. Additionally, Tarun Plus extends funding up to ₹20 lakh for proven borrowers.
The scheme is backed by a Credit Guarantee Fund for Micro Units, which reduces lender risk. Since its launch, PMMY has sanctioned over ₹27 lakh crore to more than 46 crore beneficiaries. Notably, women account for nearly 68 percent of loan holders, making it one of India’s most inclusive entrepreneurship schemes.
3. Startup India Seed Fund Scheme – Early-Stage Support
The Startup India Seed Fund Scheme supports startups at the idea-to-prototype stage. Instead of direct grants, the government disburses funds through selected incubators to ensure due diligence. Eligible startups can receive grants up to ₹20 lakh for proof-of-concept, product development, and market testing. Additionally, startups may access up to ₹50 lakh as convertible debt for market entry and commercialization.
Only DPIIT-recognised startups under two years old can apply. Startups already receiving significant government funding remain excluded. The scheme aims to support around 3,600 startups through 300 incubators, backed by an outlay of ₹945 crore. Consequently, it plays a crucial role in reducing seed-stage failures.
4. Credit Guarantee Scheme for Startups – Risk-Sharing Support
The Credit Guarantee Scheme for Startups enables banks and financial institutions to lend without demanding collateral. Under this scheme, the government guarantees up to 80 percent of the sanctioned loan amount. It covers term loans, working capital facilities, and structured credit products. Typically, the maximum guaranteed exposure remains around ₹10 crore.
Only DPIIT-recognised startups operating in notified sectors qualify. The guarantee can extend up to a ten-year tenure. By de-risking institutional lending, the scheme improves long-term credit access for asset-light and innovation-driven startups.
5. Atal Innovation Mission – Incubation and Challenges
The Atal Innovation Mission nurtures innovation across schools, universities, and startup ecosystems. It operates Atal Incubation Centres that provide advanced labs, mentorship, and investor networks. Community Innovation Centres focus on entrepreneurs from underserved and remote regions. Atal Tinkering Labs promote problem-solving and creative thinking among school students. Additionally, AIM’s Grand Challenges fund solutions to critical national problems.
Strategic partnerships with corporates bring additional funding and domain expertise. Today, hundreds of Atal Tinkering Labs and over 60 incubation centres operate nationwide, supporting thousands of innovators annually.
6. Prime Minister’s Employment Generation Programme – Manufacturing Focus
PMEGP is a credit-linked subsidy scheme aimed at creating new micro-enterprises in manufacturing and services. It places special emphasis on rural and semi-urban regions. Manufacturing units can avail loans up to ₹25 lakh, while service enterprises can access loans up to ₹10 lakh. The subsidy component ranges between 15 and 35 percent, with higher benefits for women, rural founders, and special categories.
The Khadi and Village Industries Commission implements the scheme across India. To date, PMEGP has financed approximately 8.5 lakh projects and generated more than 70 lakh jobs.
7. CGTMSE – Mainstream Credit for MSMEs
The Credit Guarantee Fund Trust for Micro and Small Enterprises supports MSMEs through collateral-free lending. It provides guarantee coverage of up to 85 percent for smaller loan amounts. The scheme supports credit facilities up to ₹5 crore across sectors. SIDBI and the Government of India jointly manage the trust.
Low annual guarantee fees encourage participation from small businesses. Over 25 lakh MSMEs have benefited under CGTMSE, with guaranteed credit exceeding ₹1.4 lakh crore.
8. Stand-Up India Scheme – Inclusive Credit
The Stand-Up India Scheme promotes entrepreneurship among women and SC/ST founders. Each bank branch must facilitate at least one loan for a woman entrepreneur and one for an SC/ST entrepreneur. Loan amounts range from ₹10 lakh to ₹1 crore, covering up to 75 percent of the project cost.
The scheme supports manufacturing, services, and trading enterprises. Additionally, SIDBI-led agencies provide structured handholding support. Between 2016 and 2024, over two lakh loans worth ₹50,000 crore were sanctioned.
9. SAMRIDH Scheme – Growth-Stage Tech Funding
The SAMRIDH Scheme, operated under the MeitY Startup Hub, supports growth-stage digital and deep-tech startups. It provides matching funding of up to ₹40 lakh per startup, alongside private co-investment. The scheme focuses on sectors such as SaaS, artificial intelligence, and digital platforms.
Accelerator cohorts under SAMRIDH offer mentoring, market access, and investor exposure. By crowding in private capital, the scheme helps high-potential startups scale sustainably.
10. SIP-EIT and IP Support – Protecting Startup Ideas
Intellectual property support schemes help startups protect their innovations globally. Under SIP-EIT, startups can receive reimbursement of up to 50 percent of international patent filing costs. The reimbursement generally caps at ₹15 lakh and covers attorney fees, filing charges, and examination expenses.
Several states offer additional IP subsidies. DPIIT-recognised startups receive priority access. Thousands of innovators have secured patents through these measures, strengthening India’s technology-driven entrepreneurship ecosystem.
Grants Help, But Founders Lead
As Shobhit Jain, Founder & CEO of Edurachna, emphasizes, “Grants don’t build startups, founders do. Build first. Apply smart. Use grants as fuel, not the engine.”
Subhesh Kumar, AVP at Vedam School of Technology, adds, “Non-dilutive grants help founders build prototypes, test ideas, and gain credibility without giving away equity.”
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Government support plays a critical role in shaping India’s startup ecosystem. The Top 10 Government Grants & Schemes reduce early-stage risks while improving access to capital and credibility. Moreover, they promote innovation, inclusion, and job creation. However, founders must track eligibility updates and apply early. Ultimately, informed entrepreneurs build stronger, scalable, and future-ready businesses.
