The Ministry of MSME vide S.O. 4926 (E) dated 18.10.2022 has notified that in case of an upward change in terms of investment in plant and machinery or equipment or turnover or both, and consequent re-classification, an enterprise shall continue to avail of all non-tax benefits of the category it was in before the re-classification, for a period of three years from the date of such upward change.
This decision has been taken after due deliberations with MSME stakeholders and is in line with the Aatma Nirbhar Bharat Abhiyan. The Ministry of MSME, Government of India, has allowed those registered MSMEs to continue to avail of non-tax benefits for three years, instead of one year, in case of an upward graduation in their category and consequent reclassification. Non-tax benefits include benefits of various schemes of the Government, including Public Procurement Policy, Delayed Payments, etc.
Category: MSME
New Guidelines of Micro & Small Enterprises Cluster Development Programme (MSE-CDP) approved
The Government has approved New Guidelines of Micro & Small Enterprises Cluster Development Programme (MSE-CDP), which will be implemented during 15th Finance Commission Cycle(2021-22 to 2025-26). The scheme aims at enhancing the competitiveness and productivity of Micro & Small Enterprises by undertaking interventions such as:
- Common Facility Centers (CFCs): The central government grant will be restricted to 70% of the cost of project from Rs. 5.00 crore to Rs. 10.00 crore and 60% of the cost of project from Rs. 10.00 crore to Rs. 30.00 crore. In case of NE & Hill States, Island territories, Aspirational Districts, government grant will be 80% of the cost of project from Rs. 5.00 crore to Rs. 10.00 crore and 70% of the cost of project from Rs. 10.00 crore to Rs. 30.00 crore. The project for CFC with project cost more than Rs. 30.00 crore shall also be considered but the Government assistance would be calculated by taking into account the maximum eligible project cost of Rs.30.00 crore.
- Infrastructure Development: The central government grant will be restricted to 60% of the cost of project from Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Industrial Estate / Flatted Factory Complex and grant will be 50% of the cost of project from Rs. 5.00 crore to Rs. 10.00 crore for up-gradation of existing Industrial Estate / Flatted Factory Complex. In case of NE & Hill States, Island territories, Aspirational Districts, grant will be 70% of the cost of project from Rs. 5.00 crore to Rs. 15.00 crore for setting up of new Industrial Estate / Flatted Factory Complex and 60% of the cost of project cost from Rs. 5.00 crore to Rs. 10.00 crore for up-gradation of existing Industrial Estate / Flatted Factory Complex. The project for ID with project cost more than Rs. 10.00 crore/15.00 crore can also be considered but the government assistance would be calculated by taking into account the maximum eligible project cost of Rs. 10.00 crore/15.00 crore.
The New guidelines of MSE-CDP are available on the website of the Office of DC(MSME).
Sources: Ministry of Micro,Small & Medium Enterprises dated 27 May 2022
Financial Package To Women Entrepreneurs
The Government has taken several initiatives to support and protect the interest of women and other entrepreneurs through stimulus given under Aatma Nirbhar Bharat Packages to combat the impact of the COVID-19 pandemic in India. The packages comprise of schemes for various sectors of the economy and also schemes having impact across sectors. The specific initiatives taken to protect women entrepreneurs and MSMEs are as under:
- Rs. 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs
- Rs. 20,000 crore Subordinate Debt for Stressed MSMEs
- Rs. 50,000 crore equity infusion through MSME Fund of Funds
- New Definition of MSME and other Measures for MSME
- Rs. 10,000 crore scheme for formalisation of Micro Food Enterprises (MFE)
- Relief of Rs. 1500 crore to MUDRA loanees
- Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, businesses, MUDRA borrowers and individuals
- Rs. 5000 crore Credit facility for Street Vendors.
- Under Pradhan Mantri Garib Kalyan Package, a total of 20.40 crores (approx) women account holders (Pradhan Mantri jan Dhan Yojana) were given an ex-gratia of Rs. 500 per month for three months.
- For Self-Help groups (SHGs), limit of collateral free lending was increased from Rs.10 lakhs to Rs. 20 lakhs for women organized through 63 lakhs SHGs, who supported 6.85 crore households.
Under the ECLGS Scheme as on 28.02.2022, 81.18 lakhs women beneficiaries have been provided guarantees for loan. The State-wise details are at Annexure.
This information was given by the Union Minister of Women and Child Development, Smt. Smriti Zubin Irani, in a written reply in Lok Sabha today.
Ministry of Women and Child Development Press Release dated 01 April 2022
Annexure
Financial Package To Women Entrepreneurs
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1812411&RegID=3&LID=1
IMPACT OF COVID-19 ON SMALL BUSINESSES (Press release 10th Feb 2022)
The Government has taken a number of recent initiatives under the Aatma Nirbhar Bharat Abhiyan to mitigate the negative impact of Covid-19 on small businesses in the country and to improve their financial and market access. Some of them are:
- Rs. 20,000 crore Subordinate Debt for stressed MSMEs.
- Rs.3 lakh crores Emergency Credit Line Guarantee Scheme (ECLGS) for Businesses, including MSMEs (which has subsequently been increased to Rs. 5 lakh crore, as announced in Budget 2022-23).
- Rs. 50,000 crore equity infusion through MSME Self-Reliant India Fund.
- New Revised criteria of classification of MSMEs.
- New Registration of MSMEs through ‘Udyam Registration’ for Ease of Doing Business.
- No global tenders for procurement up to Rs. 200 crores.
An Online Portal, “Champions”, has been launched on 01.06.2020 by Hon’ble Prime Minister. This covers many aspects of e-governance including redressal of grievances and handholding of MSMEs. In order to support the MSEs during COVID-19 pandemic, a special component of “Virtual Trade Fairs” has been introduced under the existing Procurement & Marketing Support (PMS) scheme of this Ministry to enhance market access of MSEs.
From 2nd July, 2021, the government has included Retail and Wholesale Traders as MSMEs. They are allowed to be registered on Udyam Registration Portal and avail benefits of Priority Sector Lending.
This information was given by Union Minister for Micro, Small and Medium Enterprises, Shri Narayan Rane in a written reply in Lok Sabha.
Initiatives under AatmaNirbhar Bharat including structural and procedural reforms reinforce performance of the industrial sector, expected to grow by 11.8 percent in this financial year (Press release-31st Jan 2022)
Initiatives under AatmaNirbhar Bharat including structural and procedural reforms reinforce performance of the industrial sector, expected to grow by 11.8 percent in this financial year
Investor friendly FDI policy sets up new records in FDI inflows registering highest ever annual FDI inflow of 81.97 billion US$ in 2020-21
Gross bank credit to the industrial sector records growth of 4.1 percent
Production Link Incentive scheme (PLI) Scheme reduces transaction costs, improves ease of doing business
National Infrastructure Pipeline (NIP), National Monetization Plan (NMP) propel infrastructure investment
UDYAM Registration Portal and revision in the definition of the MSMEs enhance productivity, facilitating expansion and growth
Setting up of seven PM Mega Integrated Textiles Region and Apparel Parks (MITRA) notified with a total outlay of Rs. 4,445 crore
Government approves outlay of Rs. 76,000 crore for the development of semiconductors and display manufacturing ecosystem
Construction of National Highways/roads registers an increase of 30.2 percent over the previous year
1835 track km per year of new track length added by Indian Railways through new-lines and multi-tracking projects
Lakshya Bharat Portal launched to provide clear demand projections by oil and gas organizations
Ujjwala 2.0 launched to provide additional 1 crore LPG connections
Government liberalizes drone rules, revises PLI Scheme for growth in aviation sector
Maritime India Vision 2030, envisages coordinated and accelerated growth of India’s maritime sector, 100 years old Inland Vessel Act 1917 replaced with Inland Vessel Act 2021 ushering in a new era
Telecom Reforms to boost 4G proliferation, infuse liquidity and create an enabling environment for investment in 5G networks
India witness fastest rate of growth in renewable energy capacity growing by 2.9 times and solar energy expanding by over 18 times, Green Energy Corridor Projects initiated
Initiatives under AatmaNirbhar Bharat including structural and procedural reforms reinforce performance of the industrial sector, expected to grow by 11.8 perce
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1793805&RegID=3&LID=1
MSME units are together capable of constituting a complete supply chain
There is tremendous potential for Indian engineering MSMEs to be integrated into the Global Value Chain due to their manufacturing cost advantage, said Mr B. B. Swain, Secretary, Ministry of MSME. Addressing the inaugural session of MSME Conclave organized by EEPC India yesterday, Mr Swain said that for the MSMEs to achieve high growth the two most significant interventions required are related to credit assistance and technology upgradation. He noted that the Ministry of MSME has been working closely with other Ministries and Departments to facilitate the ease of doing business for MSMEs.
“The Atma Nirbhar announcements have focused on easing access to registering as MSMEs, easing their access to credit and providing them the much needed protection as far as global tenders are concerned,” Mr Swain said. He informed the participants that MSMEs engaged in manufacturing of engineering products are about 29% of the 67 lakh MSMEs which have registered since 1st July, 2020 on the Udyam registration portal. “MSME units are together capable of constituting a complete supply chain and being globally competitive because of their diverse products ranging from intermediate to final products,” Mr Swain said.
In his welcome address, EEPC India Chairman Mr Mahesh Desai said that MSMEs need to catch up a lot on the technological front as this is crucial to increase India’s share in the global value chain. “Make-in-India initiative has brought ample scope for the Indian MSMEs to work with the large scale global manufacturing firms and get access to their upgraded technology and efficient marketing techniques. Following the onset of the pandemic, large corporations in the developed world have been looking at India as an alternative destination for manufacturing,” Mr Desai said. He noted the crucial role of MSMEs in the economy saying that the sector contributes around 30% to India’s GDP and has 50% share in the country’s exports. “The significance of the MSME sector in India has long been recognized and its potential has also been identified. In the National Manufacturing Policy, manufacturing output has been targeted to increase to 25% of GDP,” he stated.
EEPC India, with nearly 60% of its members coming from the MSME sector, has been playing an instrumental role in developing the engineering MSMEs of India. It has been working closely with the government to promote the MSMEs producing engineering products and in line with the initiative of the Department of Commerce for technological upgradation, set up two technology centers in Bengaluru and Kolkata to address the problem of technological backwardness of the engineering MSMEs.
“We promise our best endeavor towards higher integration of this sector in the global value chain through continuation of our strategic activities for the upgradation of engineering MSMEs and we believe that such summits fully dedicated for MSMEs will help us to achieve our goal,” said Mr Desai.
A Knowledge Paper titled ‘Integrating Indian MSMEs to Global Value Chain’ was also released in the inaugural session of the Conclave. The paper has suggested that India’s trade regime should promote value addition in the country. “Hence, the general tariff structure should be low on raw and primary goods, slightly higher on intermediaries and the highest on final products,” it said.
It further recommended that both direct and indirect tax structure should be neutral and not discriminate between the nature of firms. “Banks and the financial institutions should be more willing to discern genuine exporters and demand less of collateral. Finally, stability in policy measures with less intervention and emphasis on neutrality on behalf of the government will be necessary,” it listed among some of the broad pointers.
Ministry of Micro,Small & Medium Enterprises Press Release dated 20 Jan 2022
What are conditions for Food License ?
A food business operator must comply following conditions:
1. Form C ( License copy) must be displayed in a conspicuous location on the premises at all times.
2. Allowing Licensing Authorities to access the premises as needed.
3. Notify authorities of any changes or alterations to the license’s activity or content.
4. At least one technical expert should be hired to oversee the manufacturing process.
The person in charge of the production process must have at least a bachelor’s degree in science with chemistry, biochemistry, food and nutrition, or microbiology, or a bachelor’s degree or diploma in food technology, dairy technology, dairy microbiology, dairy chemistry, dairy engineering, oil technology, veterinary science, hotel management, and catering technology, or any other degree or diploma in any other discipline related to the business’s specific requirements from a recognized
5. Reporting : Submit a periodic yearly report (from April 1 to March 31) by May 31 of each year. Half-yearly returns for the collection, handling, and production of milk and milk products are also required (1st April to 31st September before 30th November and 1st October to 31st March).
6. Ensure that the unit does not create any products other than those listed in the license/registration.
7. Maintain factory sanitary and hygienic requirements, as well as worker hygiene, as stipulated in Schedule – 4 for the food industry category.
8. Separately keep track of production, raw material usage, and sales on a daily basis.
9.Ensure that the raw material source and standards are of the highest possible quality.
10. No Food Business Operator shall manufacture, store, expose for sale, or authorize the sale of any article of food in any premises that is not adequately isolated from any privy, urinal, sullage, drain, or place of storage of foul and waste matter to the satisfaction of the licensing authority.
11. Ensure Clean-In-Place systems (where applicable) for frequent machine and equipment cleaning.
12. Ensure that relevant chemical and/or microbiological contaminants in food products are tested as frequently as required in accordance with these regulations, based on historical data and risk assessment, to ensure the production and delivery of safe food, at least once every six months, through own or NABL accredited/FSSA notified labs.
13. Ensure that the proper temperature is maintained as much as feasible throughout the supply chain, including chilling, shipping, and storage, from the point of procurement or sourcing until it reaches the end customer.
14 Owners of hotels, restaurants, and other food stalls that sell or expose for sale savouries, sweets, or other food items must post a notice board with separate lists of the items cooked in ghee, edible oil, vanaspati, or other fats for the knowledge of potential buyers.
15. A notice board describing the nature of the items being exposed for sale must be displayed by a food business operator selling cooked or prepared meals.
16. Every manufacturer [including ghani operator] or wholesale dealer in butter, ghee, vanaspati, edible oils, Solvent extracted oil, de-oiled meal, edible flour, and any other fats shall keep a record of the quantity manufactured, received, or sold, the nature of the oil seed used, the quantity of de-oiled meal and edible flour used, and the destination of each consignment of the substances sent out from his factory or place of business.
Steps taken by Government to improve flow of credit to MSME sector (Press release dated 21st Dec 2021)
The Reserve Bank of India (RBI) vide circular dated 05.02.2021 and 05.05.2021, has allowed Scheduled Commercial Banks (SCBs) to deduct the amount equivalent to credit disbursed to New Micro Small and Medium Enterprises (MSMEs), who have not availed any credit facilities from banking_system as on 01.01.2021, from their Net Demand and Time Liabilities (NDTL) for calculation of the Cash Reserve Ratio (CRR). This was stated by Union Minister of State for Finance Dr Bhagwat Kisanrao Karad in a written reply to a question in Rajya Sabha.
The Minister stated that this exemption is available upto Rs 25 lakh per borrower, disbursed upto fortnight ending 31.12.2021, for a period of one year from date of origination of loan or the tenure of the loan, whichever is earlier.
The Minister listed out the measures taken by the Government for improving the flow of credit to MSME sector:
- The Emergency Credit Line Guarantee Scheme (ECLGS) was announced as part of the Aatma Nirbhar Bharat Package with the objective to help MSMEs and business enterprises to meet their operational liabilities and resume businesses in view of the distress caused by the COVID-19 crisis, by providing Lending Institutions 100 per cent guarantee against any losses suffered by them due to non-repayment by borrowers. As informed by National Credit Guarantee Trustee Company Limited, as on 10,12.2021, loans amounting to Rs. 3.09 lakh crore have been sanctioned under the Scheme.
- The psbloansin59minutes Portal was launched on 2nd November 2018 to facilitate in-principle approval of loans of up to Rs 1 crore (enhanced subsequently to Rs. 5 crore) to MSMEs without human intervention. As informed by SIDBI as on 30.11.2021, loans amounting to 79,285 crore were sanctioned on the portal.
- RBI operationalized TReDS in 2017 to solve the problem of delayed payments to MSMEs. TReDS is an electronic platform where receivables of MSMEs drawn against buyers (large corporates, PSUs, Government Departments, etc.) are financed through multiple financiers at competitive rates through an auction mechanism. As on 03.12.2021, 26.64 lakh invoices amounting to Rs 56,694.14 crore have been discounted since inception by the three entities on TReDS platform.
- Factoring transactions taking place through TReDS are eligible for classification under Priority Sector Lending (PSL). Further, loans sanctioned by banks to NBFC MFls and other MFls (Societies, trusts, etc.) which are members of RBI recognized SRO for the sector for on-lending to MSE sector, loans to registered NBFCs (other than MFls) for on-lending to MSMEs and bank finance to start-ups up to 50 crore also form a part of PSL. RBI has also permitted co-lending by Banks and NBFCs to Priority sector.
- Subordinate Debt scheme for Stressed MSMEs was approved on 01.06.2020. Under the scheme, banks provide promoters of stressed MSMEs with subordinate debt up to 15% of promoter’s stake or Rs. 75 lakh, whichever is lower to be infused as equity/quasi equity in the business.
- Pradhan Mantri Mudra Yojana (PMMY) scheme was launched on 08.04.2015 to provide access to institutional finance to unfunded Micro/Small business units with collateral free loans up to Rs 10 lakh for manufacturing, processing, trading, services and activities allied to agriculture and to help in creating income generating activities and employment.
- RBI had permitted one-time restructuring for MSME accounts vide circular dated 01.01.2019, 11.02.2020 and 06.08.2020. In view of the need to support the viable MSME entities on account of the fallout of COVID-19, it was decided to extend the facility for restructuring existing loans to MSMEs up to 50 crore classified as ‘standard’ without a downgrade in the asset classification subject to the conditions issued vide circular, dated 05.05.2021 and 04.06. 2021 on ‘Resolution Framework 2.0.
- For better transmission of monetary policy, RBI has advised banks to link all new floating rate loans to external benchmark for MSEs from 01.10.2019 and Medium enterprises from 01.04.2020.
- The Regulatory Retail Portfolio threshold to a single counterparty was increased from 5 crore to 7.5 crore enabling Banks to assign a lower risk weight of 75% to such exposure to MSME entities.
युवा उद्यमी हेनरी सिंगुरा ने मशरूम की खेती को एक सफल व्यावसायिक उद्यम के रूप में विकसित किया (Ministry of Micro,Small & Medium Enterprises Press Release dated 10th Dec 2021)
मिजोरम के श्री हेनरी सिंगुरा ने मशरूम की खेती को एक सफल व्यावसायिक उद्यम के रूप में विकसित किया है और अपने क्षेत्र के युवाओं को रोजगार के नए अवसर प्रदान किए हैं। हेनरी हमेशा से ही अपने आस – पास के लोगों के लिए कुछ करने की इच्छा रखते थे इसलिए उन्होंने वर्ष 2019 में फूड माइक्रो लैब की स्थापना की। सूक्ष्म, लघु एवं मध्यम उद्यम मंत्रालय की प्रधानमंत्री रोजगार सृजन कार्यक्रम (पीएमईजीपी) योजना ने उनके उद्यम को सफल बनाने में प्रमुख भूमिका निभाई है। हेनरी ने बताया है कि मिजोरम में मशरूम की खेती आमदनी का एक मुख्य स्रोत है। एक स्टार्टअप होने की वजह से धन का प्रबंधन करना हमारे सामने आने वाली प्रमुख समस्याओं में से एक थी। पीएमईजीपी योजना के तहत हमें ऋण और 35 फीसदी सब्सिडी मिली। इससे हमारे स्टार्टअप को काफी सहायता मिली है।
Choose road to success with Ministry of MSME like Henry did.#MSME #SCSTHUB #KVIC #NSIC #NSSH@NSICLTD @minmsme @kvicindia @IndianCoir pic.twitter.com/kcntLYmnVl— Ministry of MSME (@minmsme) December 10, 2021
हेनरी आज एक सफल उद्यमी के रूप में कार्य कर रहे हैं और अन्य लोगों को भी मशरूम की खेती करने का प्रशिक्षण दे रहे हैं। हेनरी की शुरुआती चुनौती थी अपने स्टार्टअप के लिए धन की व्यवस्था करना और इसके लिए उन्हें #पीएमईजीपी योजना के तहत #मिनिस्ट्रीऑफ़एमएसएमई का सहयोग मिला।
Startups (Ministry of Commerce & Industry Press Release dated 08th Dec 2021)
To promote startups across all the State/UTs, Government of India has launched Startup India initiative in 2016. This initiative aims at building a strong ecosystem for nurturing innovation and Startups in the country. In order to meet the objectives of the initiative, Government has launched various programmes to promote Startups across the country are as below:
- Startup India Action Plan: An Action Plan for Startup India was unveiled on 16th January 2016. The Action Plan comprises of 19 action items spanning across areas such as “Simplification and handholding”, “Funding support and incentives” and “Industry-academia partnership and incubation”. The Action Plan laid the foundation of Government support, schemes and incentives envisaged to create a vibrant startup ecosystem in the country.
- Startup India: The Way Ahead: Startup India: The Way Ahead at 5 years celebration of Startup India was unveiled on 16th January 2021 which includes actionable plans for promotion of ease of doing business for startups, greater role of technology in executing various reforms, building capacities of stakeholders and enabling a digital Aatmanirbhar Bharat.
- Startup India Seed Fund Scheme (SISFS): Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise. The capital required at this stage often presents a make or break situation for startups with good business ideas. The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. Rs. 945 crore has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021-22. It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
- Fund of Funds for Startups (FFS) Scheme: The Government has established FFS with corpus of Rs. 10,000 crore, to meet the funding needs of startups. DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS. The total corpus of Rs. 10,000 crore is envisaged to be provided over the 14th and 15th Finance Commission cycles based on progress of the scheme and availability of funds. It has not only made capital available for startups at early stage, seed stage and growth stage but also played a catalytic role in terms of facilitating raising of domestic capital, reducing dependence on foreign capital and encouraging home grown and new venture capital funds.
- Ease of Procurement: To enable ease of procurement, Central Ministries/ Departments are directed to relax conditions of prior turnover and prior experience in public procurement for all Startups subject to meeting quality and technical specifications. Further, Government e-Marketplace (GeM) Startup Runway; a dedicated corner for startups to sell products & services directly to the Government.
- Self-Certification under Labour and Environmental laws: Startups are allowed to self-certify their compliance under 6 Labour and 3 Environment laws for a period of 3 to 5 years from the date of incorporatio
- .Income Tax Exemption for 3 years: Startups incorporated on or after 1st April 2016 can apply for income tax exemption. The recognised startups that are granted an Inter-Ministerial Board Certificate are exempted from income-tax for a period of 3 consecutive years out of 10 years since incorporation.
- Exemption for the Purpose Of Clause (VII)(b) of Sub-section (2) of Section 56 of the Act: A DPIIT recognized startup is eligible for exemption from the provisions of section 56(2)(viib) of the Income Tax Act.
- Startup India Hub: The Government launched a Startup India Online Hub on 19th June 2017 which is one of its kind online platform for all stakeholders of the entrepreneurial ecosystem in India to discover, connect and engage with each other. The Online Hub hosts Startups, Investors, Funds, Mentors, Academic Institutions, Incubators, Accelerators, Corporates, Government Bodies and more.
- National Startup Awards: National Startup Awards is an initiative to recognize and reward outstanding startups and ecosystem enablers that are building innovative products or solutions and scalable enterprises, with high potential of employment generation or wealth creation, demonstrating measurable social impact.
- International Access to Indian Startups: One of the key objectives under the Startup India initiative is to help connect Indian startup ecosystem to global startup ecosystems through various engagement models. This has been done though international Government to Government partnerships, participation in international forums and hosting of global events. Startup India has launched bridges with over 11 countries (Brazil, Sweden, Russia, Portugal, UK, Finland, Netherlands, Singapore, Israel, Japan, South Korea) that provides a soft-landing platform for startups from the partner nations and aid in promoting cross collaboration.
- Support for Intellectual Property Protection: Startups are eligible for fast-tracked patent application examination and disposal. The Government launched Start-ups Intellectual Property Protection (SIPP) which facilitates the startups to file applications for patents, designs and trademarks through registered facilitators in appropriate IP offices by paying only the statutory fees. Facilitators under this Scheme are responsible for providing general advisory on different IPRs, and information on protecting and promoting IPRs in other countries. The Government bears the entire fees of the facilitators for any number of patents, trademark or designs, and startups only bear the cost of the statutory fees payable. Startups are provided with an 80% rebate in filing of patents and 50% rebate in filling of trademark vis-a-vis other companies.
- Faster Exit for Startups: Ministry of Corporate Affairs has notified Startups as ‘fast track firms’ enabling them to wind up operations within 90 days vis-a-vis 180 days for other companies.
The Government of India as part of Startup India initiative has implemented Fund of Funds for Startups Scheme and Startup India Seed Fund Scheme to provide financial assistance through Alternative Investment Funds (AIFs) and incubators.
Fund of Funds for Startups (FFS) Scheme: A corpus of Rs. 10,000 crore has been sanctioned under the FFS Scheme, spread over 14th and 15th Finance Commission cycles. FFS Scheme does not directly provide financial assistance to startups, instead supports SEBI-registered Alternative Investment Funds (AIFs), who in turn invest money in growing Indian startups through equity and equity-linked instruments. AIFs supported under FFS are required to invest at least two times of the amount committed under FFS in startups
Startup India Seed Fund Scheme (SISFS): Rs. 945 crore has been sanctioned under the SISF Scheme for period of 4 years starting from 2021-22. 40% of total approved commitment is released as part of first installment to a selected incubator. Subsequent installments are released based on submission of proof of achievement of milestones.
Promoting women entrepreneurship has been a key national agenda for the Government. Out of the 58,000+ DPIIT recognised startups, 46% of them have at-least one-woman director. Further, under Startup India Seed Fund Scheme (SISFS), as on 06th December, 2021, 55 women-led startups have been sanctioned financial assistance.
Furthermore, under Fund of Funds for Startups (FFS) Scheme, as on 6th December, 2021, for 83 women led Startups, Rs. 1046.05 crore has been invested by the AIFs supported under the FFS Scheme.
This information was given by the Minister of State in the Ministry of Commerce and Industry, Shri SomParkash, in a written reply in the Lok Sabha today.
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