Over the last decade, youth’s commitment to empowering the nation’s economy has been beyond imagination. With the rising number of MSMEs in India, their contribution has even led to a surge in the national employment rate. Because of these efforts, a statistical report suggests that 16.86 crore people will have a way to make their living in 2024.
Now, looking towards this remarkable journey, the Indian government got involved in the process of setting up MSMEs and understood the challenges. Consequently, a dedicated program was initiated, and several govt schemes for businesses were launched over the past decade. They have significantly driven and promoted the startup culture.
If you’re also an MSME or starting one, continue reading further to learn more about these government schemes.
Why Consider Govt Schemes for Businesses at All?
Government schemes for business are initiatives launched by the Indian government to support MSMEs (Micro, Small, and Medium Enterprises). These schemes offer you a variety of benefits tailored to address the challenges during or while starting a new business. From financial assistance like loans and subsidies to infrastructure support like access to technology, these schemes provide a ray of hope for MSMEs. By leveraging these schemes, you can overcome any hurdles, gain access to essential resources, and ultimately achieve sustainable growth.
5 Govt Schemes for Businesses Worth Exploring
As mentioned earlier, the government has launched different support schemes for MSMEs to leverage. Since each has its benefits and is tailored as per the requirements, below are some of the schemes listed for you to explore:
- PMFME Scheme
- The Pradhan Mantri Formalisation of Micro and Small Enterprises (PM FME) scheme aims to encourage informal micro and small businesses to transition into the formal sector.
- This can benefit you by providing access to loans, subsidies, and social security benefits for your employees.
- Formalisation also simplifies legal compliances and opens doors to government tenders and contracts.
- From authorised MSME banks, you can also explore other financial products like loans, credit guarantees, etc.
- Pradhan Mantri Mudra Yojana
- Such government schemes for businesses offer microloans to small businesses, categorised as micro-units, for setting up or expanding their operations.
- PM MUDRA provides collateral-free loans through three categories: Shishu (up to ₹50,000), Kishor (up to ₹5 lakh), and Tarun (up to ₹10 lakh).
- These loans can be used for a variety of business needs, such as purchasing equipment, raw materials, or hiring additional staff.
- By providing access to much-needed capital, PM MUDRA empowers these businesses to overcome financial barriers, innovate, and contribute significantly to the nation’s development.
- Many dedicated MSME banks participate in such govt schemes for businesses, making it easier for micro-units to access these loans.
- Agriculture Infrastructure Fund (AIF) Scheme
- The Agriculture Infrastructure Fund is a government scheme designed to modernise and develop India’s agricultural infrastructure.
- It aims to address post-harvest losses and empower farmers by providing financial assistance for setting up storage facilities, processing units, and market infrastructure projects.
- Unlike the PMFME scheme, which offers loans for several businesses, this scheme offers loans and grants through eligible MSME banks.
- These government scheme loans come with attractive interest rates and flexible repayment structures, making them accessible for various agricultural projects.
- If you’re a farmer or agricultural entrepreneur, you can use the necessary funds to upgrade your infrastructure, reduce wastage, and improve overall productivity.
- CGTMSE Scheme (Credit Guarantee Fund Trust for Micro and Small Enterprises)
- Such govt schemes for businesses are aimed to make loans more accessible to MSMEs. They provide partial credit guarantee cover to the banks in case of loan default on your behalf.
- This scheme reduces banks’ risk, encouraging them to offer loans with lower interest rates and easier eligibility criteria than unsecured business loans.
- Just like the PMFME scheme, CGTMSE assists you in accessing a range of financial solutions suitable for both micro and small businesses.
- PMEGP Scheme (Prime Minister’s Employment Generation Programm)
- The PMEGP Scheme is one of the centrally-funded govt schemes for businesses, focused on creating new employment opportunities in rural and urban areas.
- They mainly target micro-enterprises which are in the non-farm sector (manufacturing, services).
- Like other govt schemes for businesses, PMEGP provides financial assistance through subsidised loans to help you set up new businesses. This amount would vary depending on the category (general or special) and location (rural or urban) of the beneficiary.
- This scheme is open to individuals over 18 with minimum educational qualifications (which vary for the manufacturing and service sectors). Self-help groups, Institutions, and Charitable Trusts can also apply.
- By offering subsidised loans, PMEGP is one of the govt schemes for businesses, helping MSMEs overcome initial financial hurdles and encouraging entrepreneurship.
Choosing the Right Govt Scheme for MSME Business Growth
Out of several govt schemes for businesses, selecting the right one can be tricky. As a newly set up MSME or already running, a partnership with reliable MSME banks can be of real help. Whether it’s a PMFME scheme, PMEGP, AIF, or any other, they can help you select the most suitable one.
Moreover, if your MSME bank is an authorised one like HDFC Bank, they’ll also offer you financial assistance based on govt schemes for businesses. You can enjoy flexible loan terms, subsidy benefits, interest rate advantages, credit guarantees, and much more.
Explore different schemes on HDFC Bank’s official website to access required funds today!