Page 41 - Banking Finance May 2022

ARTICLE

seed funding to startups through incubators in Tier 2 class manufacturing processes, and use of advanced
and Tier 3 towns which are often deprived of adequate technology.
funding. It is planned to encourage innovators from rural v) Credit Linked Capital Subsidy for Technology Up-
entrepreneurs to come forward and benefit from this gradation (CLCSS) - Under this scheme, the Government
scheme (5).
provides financial help to MSMEs to upgrade their
ii) Pradhan Mantri Micro Units Development and technology and implement state of the art technological
Refinance Agency (MUDRA) Yojana- This provides funds platform for their business. The subsidy of 15 per cent
to banks for on-lending to micro-finance institutions and is provided for investment up to Rs 1 crore for upgrading
non-banking financial institutions (NBFCs) at low rates. technology for startups and MSMEs. More than 7500
Loans up to Rs 10 lakh can be availed under MUDRA products/services are covered under this scheme.
scheme. It was launched in 2015 and within 2 years, vi) Design Clinic for Design Expertise to MSMEs- In order
more than 1.8 crore jobs were generated. Till August to encourage and inspire small businesses to experiment
end, 2020, more than 67 lakh loans amounting to Rs
and try out new designs for their products, the
48,000 crores have been sanctioned under the MUDRA Government has created a Design Clinic for inducing
scheme. There are three categories startups which
design related expertise for startups and MSMEs. Under
include: (a) Shishu: This is for new businesses being
this scheme, the Government provides the grant up to
eligible for loans up to Rs 50,000. (b) Kishor: This is for Rs 60,000 for attending design seminars and up to Rs
mid-aged businesses to get up to Rs 5 lakh and, (c): 3.75 lakh or 75 per cent of the cost of the seminar,
Tarun: This is for existing & experienced businesses to wherein the entrepreneur can learn and implement
receive up to Rs 10 lakh can be availed. This MUDRA design theories and practices.
loan scheme also covers MSMEs such as Small
Manufacturing Units, Retailers, Wholesalers, Artisans vii) Development of Portal- An online portal is created by
etc. DPIIT which allows incubators to apply for funds (6). An
Experts Advisory Committee (EAC) has been created by
iii) Credit Guarantee Trust Fund for Micro & Small
DPIIT to execute and monitor the Grant up to Rs 5 crore
Enterprises (CGTSME) - This is one of the biggest Startup offered to the eligible incubators selected by the EAC.
loan schemes launched by the Ministry of MSME. Under By availing the grant from the DPIIT, the selected
this scheme, collateral-free loan up to Rs 1 crore is incubators provide loans to banks for on-lending to the
provided to eligible startups and MSMEs. Now, the enterprise up to Rs 20 lakhs. Further, investment up to
guarantee cover is available up to Rs. 5 lakhs. Rs 50 lakhs is also provided to the startups for market
iv) Financial Support to MSMEs in ZED Certification Scheme entry, commercialization, or scaling up through
- This covers both existing and new manufacturing units convertible debentures or debt-linked instruments. The
under Zero Defect and Zero Effect (ZED) mission with a promising startups that are supported at their early
view to create better products, with high quality and stages, shall create huge employment opportunities for
zero defects which, in turn, aims to embrace the world- everyone. The scheme also envisages to promote virtual
incubation for Startups by enabling incubators to
support startups from all corners of the country.
Towards this end, an Action Plan for Startup India is
already prepared by the Government in January 2021.
In the first meeting of the National Startup Advisory
Council held in April 2021, it was found that startups
have the potential to become the World's largest and
most innovative startup ecosystem. As a first step, there
is a need to sow the seeds of entrepreneurship even at
school level to encourage students to innovate. The
Council also calls upon the successful entrepreneurs to
take initiative to share their knowledge, experience,
ideas and mentor the other entrepreneurs

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