Government Schemes for Startups

October 18, 2025 by Team Instabizfilings

What “Government Schemes” Means in Startup Context

These are initiatives from Central (and in some cases State) level governments that offer benefits including:

Grants / seed-funding
Debt finance under good terms
Credit-guarantees (i.e. lower risk to lenders)
Tax incentives & compliance relief
Incubation / mentorship / accelerator support
Procurement preference, IP help

Most of these require recognition as a "startup" status from DPIIT (Department for Promotion of Industry and Internal Trade) under a mechanism in the Startup India scheme.

Key Startup Schemes (2025) Central Govt

Below are the most important active/updated schemes in 2025.

Scheme	Objective / What it Offers	Major Benefits / Recent Updates	Eligibility & Key Criteria	Application / Process Highlights
Credit Guarantee Scheme for Startups (CGSS)	To give guarantee cover for debt financing (venture debt, working capital, etc.) extended to DPIIT-recognised startups. Helps reduce risk for lenders so startups can get loans without heavy collateral.	• In 2025, guarantee cover ceiling per borrower increased from ₹10 crore to ₹20 crore. • The extent of guarantee: 85% cover for loans up to ₹10 crore; 75% for loans above that. • For startups operating in Champion Sectors (under “Make in India”), Annual Guarantee Fee (AGF) has been reduced from 2% pa to 1% pa.	• Must be a DPIIT-recognised startup. • Eligible lenders (“Member Institutions”: banks, NBFCs, SEBI-registered AIFs etc.) must register under the scheme. • A startup should not be an NPA, not in default; creditworthiness etc. assessed by the lender.	Apply through a Member Institution (bank/NBFC/AIF) that is registered. The MI will submit a guarantee request on the portal of NCGTC (National Credit Guarantee Trustee Company).
SAMRIDH Scheme (MeitY Startup Hub: Startup Accelerators of MeitY for Product Innovation, Development, and Growth)	To accelerate product-innovation and growth of early-stage/startups in software / electronics / tech sectors by working via accelerators. Provides financial, mentorship, market & investor connect.	• “Second cohort” has been launched; supporting 125 startups. • Financial support up to ₹40 lakh per startup is available under this scheme. • Also non-financial support: mentoring, product development, investor connect etc.	• Must be a startup according to DPIIT definition. • Preference may be given to having some revenue or traction. • Sector alignment (IT, Electronics etc.) gives advantage.	Apply via MeitY Startup Hub or partner accelerators. The startup needs to be part of a participating accelerator. There are periodic calls (“cohorts”) under which applications open.
Startup India (DPIIT Recognition & associated benefits)	Flagship policy, including recognition, tax incentives, regulatory ease, IPR support, benefits in public procurement etc.	• DPIIT recognition gives eligibility for many other schemes (CGSS, seed fund etc.). • Self-certification of labour & environmental laws. • Tax exemption (Section 80IAC) for 3 years within the first 10 years. •IP/Patent/Trademark incentives: rebates, fast tracking.	• Private limited company or LLP, DPIIT definition of startup: innovation / scalable, in business not more than certain years etc. • Turnover thresholds etc as per policy. • Recognised via the official portal.	Use Startup India portal to apply for recognition. Must provide documents, business details etc. Once recognised, you can apply for benefits, tax relief, etc.
Other schemes relevant for startups / MSMEs	Pradhan Mantri Mudra Yojana (PMMY): small business & non-corporate/micro units, for small loans. Stand-Up India Scheme: Loans for women & SC/ST entrepreneurs, greenfield enterprises. MSME support schemes like credit linked subsidy, digital MSME, etc.	These offer smaller amounts / are more widely known; they complement the startup-specific schemes. Can help in the early stage, for working capital, or getting infrastructure.	Eligibility varies: e.g. under PMMY, amount tiers (Shishu, Kishor, Tarun), and non-collateral; Stand-Up India has special criteria for women / SC/ST; MSME schemes often require Udyam registration etc.	Apply through banks, MSME offices, or via portals. Best to check State and local nodal agencies, since many schemes have state-level implementation details.

Recent / 2025 Changes & Enhancements You Should Know

CGSS (Credit Guarantee Scheme): ₹20 crore limit (up from ₹10 crore) per startup; also better coverage percentage; lower fees for Champion Sectors.
SAMRIDH second cohort is well underway; more startups supported; budget allocated and more accelerators involved.
Some schemes are pushing increased inclusion: preference / special treatment for women entrepreneurs, SC/ST founders, for startups in Tier 2 / Tier 3 cities. (There is variance in implementation by state.)
Push to reduce regulatory friction: faster trademarks/patents, more self-certification, etc., under Startup India and associated policies.

How to Use These Schemes Effectively Tips for Founders

Get DPIIT Recognition Early : Many benefits (CGSS, Startup India benefits, innovation / IP rebate, procurement benefits) are only available after obtaining recognition, so get it as soon as possible and ensure you are compliant.
Know Your Stage & Needs : If you require seed funding / product prototyping schemes such as SAMRIDH, or incubator grants. If you require working capital / debt for scaling CGSS or credit guarantee.
Prepare Documentation : Much of the time, these schemes will expect audited statements, calculated growth projections, proof of innovation / IP, company registration documents, details of founders, and share structure. If you are prepared, it is easier.
Understand the Costs/Fees : As an example, for CGSS the AGF is a guarantee cover of funding to support roughly half of your project expenses; but the federal cost of AGF is a guarantee fee, interest, or requirements of matching expenses.
Find & Use State / Local Variants : Many provinces and states have their start-up policies or initiatives with extra grant funding, incubation supports, or subsidies. Many times, these will overlay well with federal and national schemes.
Watch Time Windows & Cohorts : Some of these schemes or programs are only open for a certain time (e.g., SAMRIDH cohorts, various accelerator calls). There are also calendars for "calls" at the different accelerators. If the period closes, it only means waiting for the next cohort.
Leverage Incubators / Accelerators : The value of incubators: typically, being recognized as an incubator supports getting the status (funding, mentorship, connections with investors, and accessing programs which go through incubator models).

Common Challenges / What’s Still Weak / To Improve

Although CGSS makes guarantees available, banks/NBFCs are often either not aware or reluctant to participate in the program, which makes it difficult to access. Ground implementation still has friction.
The regular paperwork/procedural differences reduce effectiveness founders will often talk about long approval times, misunderstandings about who is eligible.
Startups don’t always want the equity vs debt mix yield but sometimes it is necessary. The terms of the debt sometimes can be cumbersome, even within some programs.
Awareness - Tier-2/Tier-3 has uneven awareness and support.

How to Map the Right Schemes to Your Startup

Your Situation	Best Schemes to Explore First
You are very early stage (idea / prototype)	Startup India recognition → SAMRIDH (if tech) → incubators / Startup India Seed Fund (if available)
You have product / some revenue but need capital or working capital / scaling	CGSS (credit guarantee), term loans, accelerators under SAMRIDH, state-level seed funds or matching grants
You are in special categories (women / SC/ST / from smaller cities)	Stand-Up India, schemes with preference, state policies, special grants under Startup India etc.
You want IP protection or ease of regulatory compliance	Startup India (IP rebates, fast tracking), incubators / AIM, legal/method support during scheme application

Disclaimer

The information provided in this blog is purely for general informational purposes only. While every effort has been made to ensure the accuracy, reliability and completeness of the content presented, we make no representations or warranties of any kind, express or implied, for the same.

We expressly disclaim any and all liability for any loss, damage or injury arising from or in connection with the use of or reliance on this information. This includes, but is not limited to, any direct, indirect, incidental, consequential or punitive damage.

Further, we reserve the right to make changes to the content at any time without prior notice. For specific advice tailored to your situation, we request you to get in touch with us.