Starting and running a small business in India can be both rewarding and challenging. To support entrepreneurs and boost economic growth, the Government of India has launched several schemes to provide financial assistance, training, and infrastructure support. If you’re a small business owner or planning to start one, here are the top 5 government schemes in India you should know about.
1. Pradhan Mantri MUDRA Yojana (PMMY)
Launched: 2015
Objective: To provide collateral-free loans to micro and small enterprises.
Details:
Under PMMY, small business owners can apply for loans under three categories:
- Shishu – up to ₹50,000
- Kishor – ₹50,001 to ₹5 lakhs
- Tarun – ₹5 lakhs to ₹10 lakhs
The loans are offered by banks, NBFCs, and microfinance institutions. No collateral is required.
Best for: Small traders, shopkeepers, artisans, manufacturing units, and startups.
2. Stand-Up India Scheme
Launched: 2016
Objective: To promote entrepreneurship among women and SC/ST communities.
Details:
The scheme offers bank loans ranging from ₹10 lakhs to ₹1 crore for setting up new businesses in manufacturing, trading, or service sectors. One loan is provided per bank branch to at least one woman and one SC/ST entrepreneur.
Best for: Women entrepreneurs and SC/ST business owners starting a new venture.
3. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Launched by: Ministry of MSME and SIDBI
Objective: To provide loan guarantees for small businesses.
Details:
This scheme helps small businesses get collateral-free credit up to ₹2 crore. In case of loan default, the trust compensates the lender up to a certain percentage.
Best for: MSMEs seeking easy access to institutional credit without providing security.
4. MSME Champion Scheme
Launched: 2021
Objective: To make MSMEs globally competitive.
Details:
This scheme includes financial assistance for technology upgradation, quality certification, IPR support, export promotion, and digital empowerment. It also includes the Self-Reliant India Fund to support equity investments.
Best for: Growth-stage small businesses looking to scale and modernize.
5. Prime Minister’s Employment Generation Programme (PMEGP)
Launched by: Ministry of MSME
Objective: To generate self-employment opportunities through micro-enterprises.
Details:
PMEGP provides a subsidy of 15-35% on project costs for eligible entrepreneurs setting up new ventures in manufacturing and service sectors.
- Max project cost for manufacturing: ₹25 lakhs
- Max project cost for services: ₹10 lakhs
Best for: First-time entrepreneurs and unemployed youth.
Key Benefits of These Schemes
- Easy access to low-interest or interest-free loans
- Support for women and marginalized groups
- Encouragement for self-employment and job creation
- Access to technical training and mentoring
- Growth support for startups and small enterprises
How to Apply for These Schemes
You can apply for these schemes through:
- Your nearest bank branch
- Online portals such as udyamregistration.gov.in, mudra.org.in, and individual state government websites
- Common Service Centers (CSCs) in rural and semi-urban areas
Make sure you have documents like:
- Aadhaar Card
- PAN Card
- Business plan
- Bank account details
- Proof of residence
Conclusion
The Indian government is taking strong steps to empower small businesses by providing financial and structural support. Whether you’re just starting out or looking to scale up your operations, these top 5 schemes can help you build a successful and sustainable enterprise. Make sure to explore these options and pick the one that best fits your business needs.
Also Read : What is the Sukanya Samriddhi Yojana and How It Works – A Simple Guide for Indian Parents