With the growing importance of SMEs and the fact that $33.62 billion was poured into Indian startups since 2014, the Government of India is taking matters into their own hands by developing programs to support startups.
Small, and Medium Enterprises (also known as SMEs) are the driving force behind India’s development. Not only are 60 million people employed by SMEs, by creating 1.3 million jobs annually but it contributes 45% of the industrial output and 45% of India’s exports.
With the growing importance of SMEs and the fact that $33.62 billion was poured into Indian startups since 2014, the Government of India is taking matters into their own hands by developing programs to support startups. Let’s explore what they are:
Startup India: Founded in 2016 by the Government of India, Startup India promotes entrepreneurship by mentoring, nurturing and facilitating startups throughout their life cycle. Startups participate in a four-week free online learning program and have access to research parks, incubators, and startup centres around the country. Additionally, there is a “Fund of Funds” available to support startups to have better access to funding.
STEP (Startup Training and Employment Programme) for Women: STEP was launched by the Government of India’s Ministry of Women and Child Development with the goal of giving women the skills they need to create a home business and become independent.
Atal Innovation Mission (AIM): AIM is the Government of India’s project to promote innovation and entrepreneurship. It is also the platform for their ATL and AIC programmes. The incubators within Atal Incubation Centres (AICs) give startups access to industry experts, business planning support, seed capital and training.
Digital India: This initiative is an effort to modernize the country and digitize every corner of the nation. This program aims to improve citizen participation in the digital and financial space, make India’s cyberspace safer and more secure, and improve ease of doing business digitally. A big focus is to make high-speed internet available.
In partnership with the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) which provides digital skills to adolescents, the Digital India initiative offers digital support to up and coming SMEs.
Make in India: Make in India’s initiative is to transform India into a global design and manufacturing hub. The program has helped replace, an obscure and obsolete framework with modern and transparent ones. This has, in turn, helped procure investments, foster innovation, develop skills, protect intellectual property and build best-in-class manufacturing infrastructure.
Defence Policy 2018: While the policy is of great value for the growth of the defence sector, this policy has a lot in store for SMEs too. Defence Policy 2018 has included several new allocations for boosting local manufacturing and independence in approximately 13 categories of weapons and support systems. The government has included reservations for the SME sector, increased foreign direct investment (FDI) in defence from 26% to 49%, and fixed the export target at Rs 35,000 crore by 2025.
Insolvency and Bankruptcy Code Ordinance: The delay in recovering bills and receivables has often affected the business of SMEs. This leads to severe liquidity constraints and financial hardships, ultimately turning them into non-performing assets (NPAs) and affecting their sustainability.
The Insolvency and Bankruptcy Code Ordinance has permitted them to bid for the enterprises that are undergoing Corporate Insolvency Resolution Process (CIPS), as long as they don’t attract other related disqualifications and are not wilful defaulters. The central government has also given the power to make additional exemptions and modifications issued in public interest and SMEs.
This Article is written by Rohit Arora, CEO & Co-founder of Biz2Credit.