On 5th April 2016, the Indian government launched the Stand Up India scheme, which was made to promote entrepreneurship among women and scheduled castes and tribes. The Department of Financial Services (DFS), Ministry of Finance, Government of India provided the announcement of this scheme.
Stand Up India allows individuals to have a bank loan of around Rs 10 lakh and Rs 1 Crore to at least one scheduled caste or scheduled tribe. In addition, it allows single women to attain the loan for business and entrepreneurship purposes. However, if the individual is not alone and has a partner alongside, the shares of the company should be at least 51- 49 in favor of scheduled caste or women.
What are the Eligibility Criteria for the Stand Up Scheme?
- The age of SC/ST and/or woman entrepreneurs should be at least 18 years old to qualify for the scheme.
- All the loans under this scheme are only available for the greenfield project. The meaning of the greenfield project is that it will help the beneficiary of the manufacturing services or trading sector.
- Shares will be distributed in the ratio of 51:49 if there is a partner with the SC/ST and/or woman entrepreneur.
- The borrower should not be working in a bank in order to attain the loan.
This loan comes under the MSME loan, which is a great initiative taken by the Indian Government. Whereas the Start-up India was started on 16th January 2016, which is another great initiative by Prime Minister Shri. Narendra Modi.
Some benefits of Start-up scheme
Income tax
When you get registration for the Start-up scheme in India, you will enjoy the income tax benefit under the head. However, it can only be applied by getting Inter-Ministerial Board. In addition, if they invest money in specified funds, they will ask for an exemption from tax on Capital Gains.
Finance
Through the help of Start-up India, the business has a financial benefit. Every start-up is patent-based, and with the help of this scheme, they will get an 80 percent rebate on the patent costs. High costs that are incurred in the patent registration process are known as patent costs. In addition, the government pays the fees of the facilitator as well.
Government tenders
Due to high payments and large projects, everybody wants to acquire government tenders. However, getting government tenders is no piece of cake. In this scheme, it is mentioned that the individuals will be provided with government tenders, and they don’t even need any experience in order to get them.
Benefit of registration
There is the benefit of registration for those who believe that business incorporation and registration are way more difficult than running it. The process is long and difficult to understand. No worries! There is an application to facilitate the registration process. There will be a meeting arranged at the start-up hub. Every problem and doubt will get cleared during the meeting.
Network opportunities on a larger level
There is a huge opportunity to meet with several stakeholders at a particular place and time. There will be two start-up fests conducted by the Indian government, which will be at both domestic as well as international levels. It is like an Intellectual Property awareness workshop and awareness program.
Some drawbacks that Start-up India faced
Here are some of the drawbacks that were faced by the start-up India scheme during the launching process. It is vital to consider these points before you try to get involved in this particular scheme. So, make sure you read them all.
- There is a short-term perspective of the Indian government towards the Start-up India scheme. There are no long-term plans for the Indian government.
- A competent workforce is essential for the success of a new business. However, without the initial funds in the new business, there are fewer successful companies in the SMEs.
- There is a higher risk of failure due to the start-up scheme compared to other organizations and businesses. The reason for that is they try to take drastic steps in a short period of time.
- Execution of the new business plan gets more difficult because you have the pressure of repaying the loan.
