The Start-up India Initiative

Every individual with a path-breaking idea wishes to turn it into a reality. Unfortunately, they do not possess the knowledge of the pre-requisites to conceptualise it. This is where the Start-up India Initiative comes into picture.

Overview:

The Startup India Initiative is a flagship initiative of the Government of India, intending to build a strong eco-system for nurturing startups and innovations in the country. This will enable a sustainable economic growth and generation of large scale employment opportunities in India. 

Benefits:

How can a start-up benefit from this initiative?

A start-up can benefit from this initiative in the following ways:

1.       One stop Registration

To commence operations, a start-up would need to get themselves registered with the relevant regulatory authorities. They might face uncertainty regarding the exact procedure to be followed and the list of necessary documentation. To help an organisation with this, a start-up can download the Government of India (GoI) app for android phones here.

The mobile app will help the start-up in the following ways:

  1. Registration:
  • The app will register your start-up with the relevant agencies of the government. It will provide you with a simple form for the same.
  1. Tracking:
  • The start-up will be able to track the status of the registration application and download the registration certificate at any given time. The mobile app will provide a digital version of the final registration certificate which can be easily downloaded.
  1. Compliance:
  • The app will help the start-up file for compliances and obtain information on various clearances, approvals and registrations required.
  1. Networking:
  • The app provides a collaborative platform with a national network of stakeholders (venture funds, incubators, academia and mentors) of the start-up ecosystem.
  1. Schemes:
  • The app will help you apply for various schemes that are being undertaken under the Start-up India Action Plan.

2.       Self-certification for Compliance

In order to make it easier for start-ups to be compliant to all applicable laws and regulation, the government has made a few simplifications. While other agencies certify normal companies for their compliance, start-ups can self-certify themselves.

They can do so through the start-up mobile app with the below mentioned nine labour and environment laws.

The labour laws:

  • The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour (Regulation and Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

The environment laws:

  • The Water (Prevention & Control of Pollution) Act, 1974
  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
  • The Air (Prevention & Control of Pollution) Act, 1981

In case of labour laws, the government will not conduct any inspections for a period of 3 years. The start-up will be inspected only on receipt of credible and verifiable complaint of violation (filed by an officer who’s at least one level senior to the inspection officer).

  • If a start-up falls under the “white category” (as defined by the Central Pollution Control Board), they will be able to self-certify compliance and only then random checks would be carried out.

3.       Start-up India Hub

The government understands that many start-ups do not reach their full potential due to limited guidance and access to financial assistance. Therefore, it has set-up a platform called ‘Start-up India Hub’ where start-ups can easily collaborate with key stakeholders, receive financial assistance, and guidance under mentorship programmes.

The Startup India Hub will provide the following support and assistance:

  • The Hub will work in a Hub & Spoke model and help a start-up collaborate with Central and State governments, Indian and foreign venture capitalists (VCs), Angel networks, Banks, Incubators, Legal partners, Consultants, Universities, and R&D institutions.
  • It will assist a start-up in obtaining financing, conducting feasibility testing and providing advisory services for business structuring.
  • The Hub will help you enhance your marketing skills, technology commercialization, and management evaluation.
  • It will organise mentorship programmes in collaboration with government organisations, incubation centres, educational institutions and private organizations who aspire to foster innovation.

Note:

The Hub will be operational from 10:00 AM to 5:30 PM on working days and can be reached via the toll free number: 1800115565 or the email ID: dipp-startups@nic.in

Register to the Hub online by clicking, here

4.       Relaxed norms of public procurement for Start-ups

In order to provide an equal opportunity to start-ups in the manufacturing sector, the government has relaxed the norms for public procurement. The eligibility criteria for a Normal Company to bid for the tenders floated by the government entity or a public sector undertaking (PSU)requires ‘prior experience’ or ‘prior turnover’.

Therefore, in order to help start-ups, the government has exempted them from the criteria of ‘prior experience/turnover’. However, there will be no relaxation in quality standards or technical parameters. A start-up will have to demonstrate the necessary capabilities to execute the project as per requirements and they should have their manufacturing facility in India.

5.       Faster exit for Start-ups

Even though start-ups are highly innovative in nature, they have lower success rates. The government understands that when a start-up fails, it is critical to reallocate capital and resources to more productive avenues.

To tackle this critical situation, the government has proposed a swift and simple process that start-ups can follow to cease their operations. This initiative helps first-time entrepreneurs to experiment with innovative ideas without having to worry about facing a long-drawn exit process where their capital tends to be interminably stuck.

As per the Insolvency and Bankruptcy Bill 2015 (IBB), if a start-up has a simple debt structure or has met all the specified criteria, they can discontinue their operations within a period of 90 days from the time of submitting the application.

In such instances, the government appoints an insolvency professional who would be in charge of the start-up in place of the promoters and management. The professional will take care of liquidating the start-up’s assets and pay its creditors within six months of their appointment. This process respects the concept of limited liability.

6.       Credit guarantee fund for start-ups

The major concern for most start-ups is receiving funding support for their business ventures. The government understands that in order to encourage experimentation among budding entrepreneurs, they need to provide a type of credit guarantee comfort.

The Department of Industrial Policy and Promotion (DIPP) are therefore in the process of setting up a corpus of ₹2,000 crore that will provide 80% risk cover and hence enable banks and financial institutions to provide collateral free credit to start-ups. The government has also envisaged a credit mechanism scheme through National Credit Guarantee Trust Company (NCGTC) and SIDBI with a budgetary corpus of ₹500 crore for the next four years.

7.       Providing funding support through a Fund of Funds with a corpus of ₹10,000 crore

In the initial stages of the establishment of a start-up, it is highly difficult for them to gain financial assistance. This is mainly because the start-up might lack collateral or not have any existing cash flow. Also as the probability of a start-up failing is really high which make them an unattractive investment.

Therefore, the government has set up a fund with an initial corpus of ₹2,500 crore and a total corpus of ₹10,000 crore over a period of four years. This fund would be in the nature of ‘Fund of Funds’ which will be managed by SIDBI. The fund will invest in SEBI registered Alternative Investment Funds (AIFs) which, in turn, will invest in start-ups.

This fund would help a start-up attract private capital in the form of equity, quasi-equity, soft loans and other risk capital.

The key highlights of the Fund of Funds’ are as follows:

  • Life Insurance Corporation (LIC) of India will be a co-investor in the ‘Fund of Funds’
  • A wide range of sectors will be covered under this fund. The sectors covered will include manufacturing, agriculture, health care and education
  • A contribution of up to 50% will be made by the ‘Fund of Funds’ to the daughter fund. In order to be eligible for contribution by the ‘Fund of Funds’ the daughter fund should have already raised 50% or more of the stated fund

8.       Tax exemption on capital gains

Investing in a start-up during its initial stages is very risky, hence the government has come up with various incentives in order to attract investors. Investors can now avail exemption on capital gains, if the gains are invested in the ‘Fund of Funds’ recognised by the government.

This will in turn increase the funds available to various VCs/AIFs for investment in start-ups. The government has also extended the existing capital gain tax-exemption for investment in newly formed start-ups.

In order to avail the exemption, the entity needs to purchase new assets with the capital gains received. Investment in computer or computer software will also be considered as purchase of new assets.

9.       Tax exemption to Start-ups for 3 years

The government is aware of start-ups making significant capital investments in order to embrace ever-changing technology, combat rising competition, and overcome the challenges of running a start-up.

In order to facilitate the growth of start-ups and provide them with a competitive edge, they will be exempted from paying income tax for a period of 3 years. Start-ups that are incorporated between April 1, 2016 and March 31, 2019 will be eligible for the exemption.

To avail this benefit, the start-up must also get a Certificate of Eligibility from the Inter-Ministerial Board. Start-ups should not distribute dividends in order to avail the exemption.

10.     Tax exemptions on investments above Fair Market Value

Under the Income Tax Act, 1961, any consideration received for the issue of shares that’s above the ‘Fair Market Value’ (FMV) of such shares, the excess consideration received is taxable under ‘Income from Other Sources’. However, when it comes to start-ups, it becomes difficult to determine the FMV of these shares. The FMV generally tends to be significantly lower than the value at which the capital investment was made.

Under the Start-up India plan, start-ups are exempted from paying this tax. Therefore, investments can be made by venture capital funds and incubators without being taxed.

11.     Organising start-up fest for showcasing innovation and providing a collaboration platform

In order for a start-up to grow, it is necessary to have regular communication and collaboration within the start-up community, i.e., both national as well as international. However, an effective start-up ecosystem is dependent upon the participation of academia, investors, industry and other stakeholders.

In order to strengthen the start-up ecosystem in India, the Government has introduced start-up fests at the national and international level.

These fests will help a start-up showcase their work in front of a larger audience comprising of potential investors, mentors, and fellow start-ups. There will be one fest held at the national level on an annual basis. This will help all the stakeholders of a start-up ecosystem to come together at one platform.

There will also be one fest held at the international level on an annual basis. This will be held in an international city that is known for its start-up ecosystem. The fest will be full of activities and interactive sessions.

It will have exhibitions and product launches, where start-ups can pitch their ideas. It includes:

  • Mentoring sessions
  • Curated start-up walks
  • Talks by disruptive innovators
  • Competitions such as Hackathon, Makerspace, etc.
  • Announcements of rewards and recognitions
  • Panels and conferences with industry leaders, etc.

12.     Building innovation centres at National Institutes

The government understands there’s a need to increase the incubation and R&D efforts in the country. It

Under this initiative, the following benefits will be provided:

  • The government shall set-up 13 start-up centres
  • An annual funding support of ₹50 lakh will be provided for 3 years in order to encourage student driven start-ups from the host institute. The funds will be provided by the Department of Science (50%) and the Ministry of Human Resource Development (50%)
  • The government shall set-up or scale-up 18 Technology Business Incubators (TBI) at NITs/IITs/IIMs etc

The start-up centres and TBIs will be set-up at the following locations –

Start-up Centres Technology Business Incubators
RGIIM Shillong NIT Goa MANIT Bhopal IISER Bhopal NIT Warangal
NIT Delhi NIT Agartala NIT Rourkela IIM Rohtak MNIT Jaipur
MNIT Allahabad NIT Silchar NIT Jalandhar IIT Mandi NIT Tiruchirappalli
VNIT Nagpur IIT Bhubaneswar IIM Udaipur IISER Mohali IIT Patna
IITDM Kancheepuram NIT Patna NIT Calicut IIT Roorkee
PDPM – IITDM Jabalpur NIT Arunachal Pradesh IIT Ropar IIM Kozhikode
ABVIIITM Gwalior IISER Thiruvananthapuram IIM Raipur

13.     Setting up of seven new research parks modelled at IIT Madras

In order to promote innovation through incubation and joint R&D efforts between academia and industry, the government will set up seven new Research Parks. These will be modelled based on the existing Research Park at IIT Madras. Each Research Park will require an initial investment of ₹100 crore.

The government plans to set-up Research Parks at the following locations –

  • IIT Guwahati
  • Hyderabad IIT
  • IIT Kanpur
  • IISc Bengaluru
  • IIT Kharagpur
  • Gandhinagar IIT
  • IIT Delhi

IIT Madras Research Park tries to enable companies who want to focus on research to set up a base in the Park. These companies can make use of the expertise provided at IIT Madras. The Research Park breaks down the traditional, artificial barriers of innovation through its connectivity and collaborative interaction.

This will help the industry to create, integrate and apply advancements in knowledge. It leverages the best practices from successful Research Parks such as those at Stanford, MIT, and Cambridge.

The guiding principles behind the park assist start-ups:

  • To create a collaborative environment between the industry and academia through joint research, projects, and consulting assignments
  • Create a self-sustaining and technologically fertile environment
  • To encourage and enable R&D activities and start-ups which are aligned to potential needs of the industry
  • Provide world class infrastructure for R&D activities and incubation
  • To enable development of high quality personnel and motivating professional growth for researchers in companies through part time Masters and PhD Programs

14.     Harnessing private sector expertise for incubator setup

The government is aware about the lack of incubation facilities across India.

The incubation facilities include physical infrastructure, provision of mentorship support, access to networks, and access to markets. The government can provide the capital required for setting up the physical infrastructure. However, the technical skills required for operating on an incubator are also pivotal. For this, expertise from the private sector can be sought.

Thus considering all of this, the government proposes to:

  • Set up 35 new incubators in existing institutions. The Central Government shall provide 40% of funding support (up to ₹10 crore), the state government shall also provide 40% and the remaining 20% will be funded and managed by the private sector for the establishment of new incubators.
  • Set up 35 new private sector incubators. The Central Government shall provide a grant of 50% (up to ₹10 crore) for the establishment of new incubators. The incubator shall be managed and operated by the private sector.

NITI Aayog will provide the funding for setting up of incubators as a part of the Atal Innovation Mission.

The following departments and agencies will be the participants for setting up of new incubators –

  • Department of Science and Technology
  • Department of Electronics and Information Technology
  • Ministry of Micro, Small, and Medium Enterprises
  • Department of Higher Education
  • Department of Industrial Policy and Promotion
  • NITI Aayog
  • Department of Biotechnology

The above mentioned departments/agencies would enter into a standard MoU with identified private sector players for creation of academia-industry tie-ups in order to nurture innovations in academic institutions.

15.     Launching of innovation focused programs for students

The government understands the importance of promoting research and innovation among young students. It has therefore implemented the following measures:

  • Innovation core:

This programme will target school kids and plans to reach out to 10 lakh innovations from five lakh schools. Out of these 10 lakh innovations, one lakh innovations will be targeted and the top 10,000 innovations will be provided with prototyping support. Out of these 10,000 innovations, 100 will be shortlisted and showcased at the Annual Festival of Innovations in the Rashtrapati Bhavan.

  • National Initiative for Developing and Harnessing Innovations (NIDHI):

This programme will help start-ups with initial funding. It aims to support 20 student-driven start-ups each year. The start-ups would be selected through a national-level competition.

The selected start-ups would receive a grant/award of up to ₹10 lakh.

The eligibility criteria to receive this funding is as follows:

  • The programme would only support student-driven start-ups. A student cannot be a part of more than one start-up
  • The start-up should be a registered company/LLP
  • It should be a project supported by the Innovation and Entrepreneurship Development Centre (IEDC)/New-Gen IEDC in the previous 5 years
  • The projects should be nominated by IEDC/New-Gen IDEC
  • The start-up should be the sole owner of the IP, the host institution should be transferred or forgone their rights on the IP

The funds would be disbursed to the start-up as per the following milestone: 70% on selection and 30% on achievement of milestone/pre-defined deliverables.

Uchhattar Avishkar Yojana

This scheme was set-up by the Ministry of Human Resource Development (MHRD) and the Department of Science and Technology (DST). IT provides financial assistance to IIT students for undertaking high quality research.

They’ve earmarked Rs.250.00 crore per annum for this scheme.

The funding towards this research will be 50.00 per cent contribution from MHRD, 25.00 per cent from DST and remaining 25.00 per cent from the industry.

Eligibility Criteria

What is the eligible criteria to be a start-up?

The eligibility criteria to be a start-up is as follows:

  1. Firm is no older than five years
  2. Annual turnover should not exceed ₹25 Cr
  3. Work is related to innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property
  4. Entity should not have been formed by splitting up, or reconstruction of a business that was already in existence

Application

How can an aspiring company apply to be recognised as a start-up?

An aspiring company can apply to be recognised as a start-up by clicking here

For further details and guidelines on this initiative, click here

Special Purpose Vehicle (SPV) Scheme for Smart Cities

They say, “Building smart cities is not about putting in place glossy skyscrapers; but about imparting a human face to urban development so that the aspirations of socio-economic advancement are fulfilled through adequate employment and livelihood opportunities.” The urban areas in our country are in need of infrastructure improvements and various amenities to better the quality of living. The Special Purpose Vehicle (SPV) is introduced by the government to realise this very desire.

Overview 

The Special Purpose Vehicle scheme is set up for the specific purpose of raising money from the market for the objective of building smart cities to achieve sustainable, long-term results.

Benefits 

How can a city benefit from this scheme?

A city can benefit from this scheme in the following ways:

  • Reduction in the levels of risk, by sharing risk
  • Security of loans or receivables
  • Encouragement for investment in property
  • Bankruptcy-proofing of the parent company in the event of default
  • Transference of off-balance sheet assets to an SPV, thereby assisting banks meet their regulatory needs
  • Maintenance of secrecy of intellectual property

Eligibility Criteria 

What is the eligibility criteria of this scheme?

The eligibility criteria of this scheme is as follows:

The paid up capital of the SPV should be such that the Urban Local Body’s share is at least equal to ₹100 crore with an option to increase it to the full amount of the first installment of Funds provided by Government of India (₹194 crore).

Application 

What is the application procedure for the SPV?

The application procedure for the SPV is the same as for the registration of companies as per the Companies Act 2013.

You can read about the process by clicking, here 

Documents Required 

What documents are required to apply for an SPV?

The documents required to apply for an SPV are:

  • A copy of agreement for Joint Venture and detailed description of the major objects of the proposed company
  • Declaration of compliance in forms no INC – 7 stating that the provisions for the companies act are followed
  • Form no. INC – 22 indicating the notice of situation, change of situation of registered office, verification or change of registered office with same locality
  • Form no. DIR – 12 for submission of details of director, manager, or secretary
  • Special Power of Attorney details in favour of practicing CA or CS responsible for all the formalities with respect to incorporation of the company

Additional documents required in case the SPV which is proposed to be set up is a Public Limited Company: 

  • Payment for application or allotment money by all directors on shares taken or having an agreement to be taken
  • Declaration in Form no 20 signed by one of the directors
  • Certificate of Commencement of Business

For further queries and guidelines with regards to this scheme, click here

India BPO Promotion Scheme

BPOs have become a common sight in India over the recent decade and have provided ample of employment opportunities. The government has introduced the Indian BPO Promotion Scheme to help set up new BPO facilities, expand the existing ones, and provide the necessary funding for the betterment of that market.

Overview

The Indian BPO Promotion Scheme provides capital support to those looking to set up a BPO. This scheme provides financial aid which can be utilized to organize a fully-functional office. This in turn helps create employment opportunities across the country, especially via Information Technology (IT), particularly in the digitally deficit areas of the country.

Benefits

What are the benefits that this scheme provides?

The following are the benefits that this scheme provides:

  1. Capital support (50% of actual expenditure) along with special incentives up to ₹1 lakh per seat in the form of Viability Gap Funding (VGF) provided
  2. Endorsed employment for about 1.5 lakh people across the country
  3. Relaxed turnover criteria for BPOs set up in the hilly areas of Jammu and Kashmir, Himachal Pradesh, and Uttarakhand

The scheme also provides special incentives (the incentive will be a percentage of eligible capital support, within a capital of ₹1 lakh per seat. If the eligible capital support is ₹100, and a company has received an added incentive of 5%, they will receive ₹105 as capital support) such as:

Particulars Percentage of incentive received
Promoting local entrepreneur 5
Providing employment to women 5
Providing employment to people with disability 2
Providing employment beyond the required target Up to 10
Setting up operations in a city/town other than the state’s capital 5

Application

What are the stages to apply for this scheme?

There are 2 stages that need to be followed in order to apply to this scheme:

  1. Expression of Interest (EoI)
  2. Request for proposal (RFP)

Documents Required

What are the documents required to apply for this scheme?

The following are the documents required to apply for this scheme.

https://ibps.stpi.in/archive/031016.pdf

You can bid online on the following website – https://eprocure.gov.in/cppp/

For additional information on this scheme, please click here and here.

Secure your Future with Aam Admi Bima Yojana

An insurance policy or cover is essential to protect yourself and your family’s future. However, high insurance premiums on most policies discourage workers from opting for the same. For workers who have been looking for the most secure insurance cover, the Aam Admi Bima Yojana is the perfect solution.

Overview:

The Aam Admi Bima Yojana scheme has been formulated by the Ministry of Finance, Government of India, in association with the Life Insurance Corporation (LIC). This scheme provides insurance cover to workers belonging to a vocational group or a rural landless household.

This scheme covers the following occupations and vocations:

  • Fishermen
  • Cobblers
  • Textile Workers
  • Forest Workers
  • Leather And Tannery Workers
  • Handloom Weavers
  • Handloom And Khadi Weavers
  • Coconut Processors
  • Plantation Workers
  • Sheep Breeders
  • Women Associated With Self-Help Groups
  • Power-Loom Workers
  • Physically Handicapped
  • Self-Employed Personnel
  • Rickshaw Pullers/Auto Drivers
  • Handicraft Artisans
  • Carpenters
  • Beedi Workers
  • Agriculturists
  • Female Tailors
  • Brick Kiln Workers

Benefits:

What are the benefits of this scheme?

The benefits of this scheme are as follows:

Insurance cover is provided against the following risks:

  • Death due to a natural cause – ₹30,000.00
  • Death due to accident – ₹75,000.00
  • Permanent disability (loss of two eyes or two limbs) – ₹75,000.00
  • Partial disability (loss of one eye or one limb) – ₹37,500.00
  • Free add-on benefit – scholarship of ₹100.00 per month for child of the worker, studying in standards IXth through XIIth

Eligibility Criteria:

What is the eligibility criteria for this scheme?

The eligibility criteria to apply for this scheme is as follows:

  • Worker’s age should be between 18-59 years.
  • Worker should ideally be the head of the family or one of the earning members of a family who is below the poverty line or marginally above the poverty line.

Application:

How can a worker apply for this scheme?

A worker can apply to this scheme by filling the application form here.

Documents Required:

What are the documents required for this scheme?

The documents required for this scheme are as follows:

  • Ration card
  • Extract from birth certificate
  • Extract from school certificate
  • Voter’s list
  • Identity card issued by reputed employer/government department
  • Unique identification card (Aadhar card)

Procedures:

The following procedures must be taken note of:

Death claim procedure

In the case of death due to natural causes, the nominee of the deceased worker has to submit the original death certificate along with the application form to the designated official of the nodal agency (central/state ministerial department, or Union Territory of India).

In case of death due to an accident the following additional documents need to be submitted –

  • Copy of FIR
  • Post-mortem report
  • Police inquest report
  • Police conclusion report/final report of the police

Accident claim procedure

The following documents need to be submitted in case the applicant suffers an accident leading to permanent total/partial disability –

  • Documentary evidence of the accident
  • Medical certificate from a government civil surgeon or qualified government orthopaedic certifying permanent total/partial disability due to accident, stating loss of limb/s of the member covered under the scheme

Scholarship claim procedure

The applicant whose child is eligible for the scholarship needs to submit an application form every six months to the nodal agency.

For more information regarding this scheme click here.

Market Development Assistance (MDA) On Production Scheme

The Khadi industry has been prevalent in the country for quite some time now. However, as modernization seeps into the bones of the country, the material ‘khadi’ has taken a step back in the markets and the consumers’ must-have lists. This has affected the khadi set-ups of the country. To combat this concern, the government of India has introduced the Market Development Assistance (MDA) on Production Scheme.

Overview
The MDA (Market Development Assistance) Scheme will help the khadi sector to improve the production and quality of khadi and increase the artisans’ earnings. Through this scheme, the khadi set-up can register itself as a khadi institution, thereby enabling them to manufacture products that are in par with other textile goods in the market.

Benefits 

How does a khadi set-up benefit from this scheme?

A khadi set-up can benefit from this scheme in the following ways:

  • Uniform distribution of sales throughout the year
  • Funds released on quarterly basis
  • Fixed portion of MDA assistance to artisans as incentive/bonus
  • Flexible to produce whatever the market desires
  • Dynamic pricing
  • Total amount of funds on production distributed amongst the spinners and weavers, producing institutions and selling institutions in the ratio 25%, 30% and 45% respectively

Eligibility Criteria

What is the eligibility criteria to register as a khadi institution?

To register as a khadi institution, a khadi set-up should:

  1. Be registered under the Co-op. Society/Trust/Regd. Institution/Firm and company/any other prevailing Act
  2. Have a common work shed/building having adequate space for carrying out spinning and weaving activities
  3. Have a minimum of 25 charkhas and 5 looms to start the khadi activities
  4. Furnish the list of 25 spinners, 5 weavers and 2 supervisors 

Application 

How to register as a khadi Institution?

Prospective khadi institutions can apply for registration online here, and then fill in Annexure I to V in here.

After applying for registration, the application will go through:

  • Online verification by the state or divisional offices of Khadi and Village Industries Commission (KVIC), followed by physical verification conducted within 15 days
  • Processing of the certificate of registration post approval from Zonal Director, Directorate of KVIC, and approval for issue of khadi certificate 

Registration Fees 

The applicant needs to submit a fee of ₹15,000 for the purpose of registration by the medium of DD or at any nationalized bank drawn in the favor of the Chief Executive Officer. The registration fee will also be accepted through RTGS in the A/c no. 30693240188, State bank of India, Vile Parle (W) Branch, IFS Code: SBIN0000515.

Documents Required 

What are the documents required to apply for the scheme?

The documents required to apply for the scheme are as follows:

  • Copy of the Registration Certificate under the Society Act/ Trust Act/Firm and company Act and or under any other prevailing Act
  • List of current Managing committee/Trusties/Directors as the case may be
  • Copy of the Resolution of the institution for registration with KVIC
  • Details about common work shed/building/work place from where the activity is proposed and or is already being done
  • Copy of self-attested by laws of the Institution
  • Details of procurement of charkhas and looms, if already purchased, indicating the date of purchase
  • NOC from State Khadi and V.I.Board (if applicable)

For further queries and guidelines with regards to this scheme, click here.

SCHEMES FOR EXPORTS OF GEMS AND JEWELLERY

Exporters of gems and jewellery import raw materials, which they make into ornaments for export. These raw materials are expensive and there is a way to procure these inputs duty-free. This is where the Schemes for Exports of Gems and Jewellery come into the picture.

Overview:

The Schemes for Exports of Gems and Jewellery provide their exporters with replenishment (REP) and diamond imprest licenses.

Benefits:

How do exporters benefit from these schemes?

The exporters benefits from the schemes in the following ways:

  1. Advance Procurement/Replenishment of Precious Metals from Nominated Agencies

An exporter of gold / silver / platinum jewellery, is allowed to obtain the same as an input for their export product from certain Nominated Agencies.

Nominated Agencies:

  • Nominated Agencies are MMTC Ltd, The Handicraft and Handlooms Exports Corporation of India Ltd, The State Trading Corporation of India Ltd, PEC Ltd, STCL Ltd, MSTC Ltd, and Diamond India Limited
  • Four Star Export House from Gems & Jewellery sector and Five Star Export House from any sector may be recognized as Nominated Agency by Regional Authority
  • A bank authorized by the Reserve Bank of India to serve as a Nominated Agency
  1. Replenishment Authorisation for Gems

This allows duty-free imports of gems. Listed below are the replenishment rates:

Gems Percentage of replenishment allowed
Cut and polished Emeralds/ Rubies/ Sapphires in Jewellery valued up to US$ 350 per carat fob. 60% for uncut and unset Emeralds Rubies/Sapphires
Cut and polished Emeralds/ Rubies/Sapphires in jewellery valued above US$ 350 per carat fob. 80% for uncut and unset Emeralds Rubies/Sapphires
All varieties of semi-precious stones and synthetic stones 50% on fob value of such stones
Pearls 60% on fob value of such pearls.
Plain Gold/Silver jewellery and articles 50%
Plain platinum jewellery and articles 50%

 

  1. Replenishment Authorisation for Consumables

Replenishment authorization allows for duty free import. Listed below are the replenishment rates:

Poly bag (as notified by Customs) for Jewellery made out of precious metals (other than Gold & Platinum) 2% of the FOB value of goods
Cut and Polished Diamonds and Jewellery made out of Gold and Platinum 1% of the FOB value of goods
Rhodium finished Silver jewellery 3% of the FOB value of goods

Eligibility Criteria:

What is the eligibility criteria for these schemes?

The following is the eligibility criteria for these schemes:

An exporter can apply for a license for import:

  • If the exporter has a minimum of three licensing years of export performance, equal to the best export performance of cut and polished diamonds in any licensing year
  • Against a valid export order in his own name
  • If an exporter of cut & polished diamonds, who is a status holder, is issued a license for import of cut & polished diamonds up to 5% of the export performance of the preceding year

Application:

How can an exporter apply for these schemes?

An exporter can apply for these schemes online by clicking here.

*Terms and conditions

The government has come up with these schemes in order to promote exports. Hence there is a need for an assurance that exporters would be exporting a higher value item for every import. The following is the minimum value addition stipulated:

Item of export Minimum value addition
Plain gold / platinum / silver jewellery and Articles and ornaments like Mangalsutra containing gold and black beads / imitation stones, except in studded form of jewellery 3%
All types of Studded gold / platinum / silver 5% Jewellery and articles thereof 5%
Any jewellery / articles manufactured by fully 1.5% mechanized process 1.5%
Gold / silver / platinum medallions & coins (excluding coins of nature of legal tender) 1.5%
Gold / silver / platinum findings / mountings manufactured by mechanized process 2.25%

For further details related to this scheme, click here.

Group Personal Accident Insurance Scheme for Coir Workers

The Coir industry has seen a rapid upswing in India with an increasing number of SMEs setting up Coir factories. But this sector does not offer its workers sufficient security in case of accidents. This is where the government’s Group Personal Accident Insurance Scheme for Coir Workers comes into the picture.

Overview:

The Group Personal Accident Insurance Scheme for Coir workers provides financial compensation to all the coir workers against accident, accidental death, permanent/temporary total disability and permanent partial disability. The entire insurance premium is paid by the Coir Board to the insurance company which can be selected by calling for quotations. Most importantly, Coir workers are not required to pay any premium for the same. 

Benefits:

How does an SME benefit from this scheme?

SME’s can benefit from this scheme in the following ways:

Compensations payable under the scheme are given below:

  • Accident death: ₹50,000
  • Permanent total disability: ₹50,000
  • Permanent partial disability: ₹25,000
  • Provision for finger cut: Depending upon the finger and limited to applicable percentages of capital sum insured

Eligibility Criteria:

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is as follows:

  • The cover provided is only for accidental death and disability
  • This policy shall provide financial compensation to the disabled coir worker or nominee of the disabled or deceased coir worker
  • The accident is defined as death or disability caused by any external violent and visible means. Drowning, snake bite, automobile accident, poisoning, falling from a tree, lightning, murder etc. are some of the accidents that come under the purview of the policy

Application:

How can an SME apply for this scheme?

An SME can apply for this scheme by filling the form here.

Documents required:

Which are the documents required for this scheme?

The documents required for this scheme are as follows:

  • Death Certificate (in case of accidental death)
  • Police Report / FIR (wherever available)
  • Post Mortem Report (wherever available)
  • Identification proofs of beneficiary, certificate issued by the Coir Society/Unit/Establishment/ Nominated Officer of Coir Board
  • Recognized photo ID proof of beneficiary and nominee
  • Disability Certificate from a registered Medical Practitioner (in case of disability)

For further information with respect to documents required, workers can drop their queries to the coir board at coirboard@nic.in and info@coirboard.org.

Zero Defect and Zero Effect Scheme

Every MSME wishes to export their goods to the foreign markets. However, the biggest obstacle they face is manufacturing quality products which match international standards. To tackle this challenge, the MSMEs need to enhance the quality of their products and production pace. This is where the Zero Defect and Zero Effect Scheme comes into the picture. 

Overview 

The Zero Defect and Zero Effect Scheme encourages MSMEs to initiate the ZED manufacturing process and helps them to improve the quality of production. This results in ease of penetration into foreign markets. It also enables them to reduce wastage, thus improving their production capacity. This also allows the MSMEs to avail more Intellectual Property Rights and develop innovative products.

Below mentioned is the list of awareness and training activities conducted under the scheme: 

  1. Industry Awareness Programmes:
  • The Industry Awareness Programmes are organised by the Quality Council of India, MSME Development Institute and other industry associations. The MSMEs can participate in these programmes free of cost. To find the list of all the programmes conducted, click here.
  • The training will be provided for the purpose of capacity-building for the North-Eastern Region, Jammu and Kashmir, and industrially backward and remote areas. This will focus on building capacity in line with Zero Defect and Zero Effect (ZED) manufacturing.
  • Other than the regular awareness programmes, the MSMEs will also be provided training with respect to Best Practices and International Benchmarking.
  • To participate in this training, MSMEs must have a ZED silver certification. As a part of this, a five-day visit to the sites of other MSMEs will be conducted by five MSMEs possessing silver certification. This is to give them an idea about the world-class practices adopted by other MSMEs in the sector. 
  1. Creation of awareness and participation through electronic medium:
  • MSMEs can get their doubts cleared about quality practices and certification by reading about them online.
  • MSMEs can gain knowledge on e-modules on lean manufacturing and quality by clicking here.
  1. Accreditation, Assessment and Rating or Re-rating:
  • Under this scheme, 22,222 MSMEs will be provided financial assistance to implement ZED assessment and certification. The MSMEs can get themselves assessed in the following three stages:
Assessment Charges
Online (e-Platform) self-assessment NIL
Desk Top assessment ₹10,000/-per MSME
Complete assessment a)      ₹80,000/- for ZED rating per MSME

b)      ₹40,000/- for additional ZED Defence rating

c)       ₹40,000/- for Re-rating

 

  • In addition to this, an MSME would receive a ZED Certificate issued by Quality Council of India.
  • Post the certificate being issued, an MSME would receive a subsidy on these fees.
  • The subsidy will be a special emphasis on SC/ST entrepreneurs.
  • The subsidy for Small Enterprise would be up to 60% of total expenditure for assessment, for Medium Enterprise would be 50% of total expenditure for assessment, while that for Micro Enterprise would be up to 50% of total expenditure for assessment but is extended up to 80% for scheduled castes and scheduled tribes.

Important Notice:

The Quality Council of India assesses an MSME’s process before rating or accrediting them. The rating depends on the MSME’s processes and after this assessment a Bronze, Silver, Gold, Diamond or a Platinum Rating is given to them. To know more about the guidelines, click here

Benefits:

How does an MSME benefit from this scheme?

An MSME benefits from this scheme in the following ways:

  • Credible recognition of the industry for international customers seeking investment in India
  • Streamlined operations and lower costs
  • Superior quality products, reduced rejection of the products and higher revenues
  • Increased environmental & social benefits
  • Additional employment generation

*MSMEs can be updated about benefits as and when announced by the Government from time to time.

Eligibility Criteria

What is the eligibility criteria for this scheme?

The eligibility criteria for this scheme is as follows:

All Micro, Small and Medium Manufacturing Enterprises throughout the country registered with Ministry of MSME (Udyog Adhar Memorandum), DIC (EM-II) or with any other agency (Industry Association and Government agency) are eligible for this scheme.

Application:

An MSME can apply for this scheme after being selected by the implementing agencies.

The Implementing agencies conduct their selection of MSME clusters or common product verticals.

With the help of electronic medium, assessment and certification assistance will be provided to the MSMEs.

After being selected, the MSMEs can fill the application form as per the guidelines mentioned in the following link

Certain percent of fees are payable in advance by the MSMEs to the National Monitoring and Implementation unit.

Mentioned below is the estimated total financial assistance for activities covered under the scheme relevant for MSMEs:

Category Financial assistance provided by Government of India (in lakhs) Contribution from the applicant (in lakhs)
Part 1    
Industry awareness programmes ₹1,470 Nil
Workshops at regional, state, and national level organised by Quality Council of India, Chambers, and variety of Industry Associations ₹60
Training to be provided for the purpose of capacity building for North Eastern Region, Jammu and Kashmir, and Industrially backward and remote areas ₹150
Training with respect to Learning Best Practices and International Benchmarking ₹400
Part 2
Development of electronic platform and provision of online support ₹200
Content writing for the purpose of capacity building ₹300
Part 3
Accreditation, Assessment and Rating or Re-rating ₹14,000 ₹6,000
Assessment of rating by the assigned credit rating and other agencies ₹1,400 ₹600
Improvement in rating to be done by gap analysis, handholding, and consultancy ₹9,800 ₹4,200
Re-rating or assessment to be done by other credit rating agencies ₹4,200 ₹1,800
Certification by Quality Council of India ₹50 Nil
Miscellaneous expenses ₹400

Note: The above-mentioned list is not exhaustive and covers the content only applicable for MSMEs.

Additional subsidy to the extent of 5% will be provided for Scheduled Caste and Scheduled Tribe Women and MSME’s located in the North Eastern Region and Jammu and Kashmir. 

Documents Required 

What are the documents required for this scheme? 

The following documents are required to apply for scheme: 

  • Post submission of application as per Annexure 3 format, an MSME can get the list of documents required from the respective implementing agency.

For further details and guidelines, please click here or here

Boost your Khadi Business with the RISC Scheme

Khadi business in India has been on the upswing recently with the Government introducing its new benefits to promote this sector. However, some entrepreneurs do not possess enough capital to expand their business. To solve this issue, the government has come up with the RISC scheme.

Overview

The RISC scheme assists you to get your business established and produce quality products for sale.

Under this scheme, The Rural Industry Service Centre (RISC) aims to provide infrastructural support and necessary services to the Khadi entrepreneurs to upgrade their production capacity, skill upgradation and market promotion.

Below mentioned is the list of agencies implementing the same:

  • Khadi Village Industries Commission and State Khadi Village Industries Board
  • Khadi and Village Industry Institutions connected with KVIC and KVIBs
  • National, State-level Khadi and Village Industry Federations
  • NGOs that have already worked in implementation of a programme and exclude the negative list of KVIC with financial assistance for minimum 3 projects from any Ministry of State, Central Government, Council for the Advancement of People’s Action and Rural Technology, National Bank for Agriculture & Rural Development and UN agencies.

Following are the details regarding the financial arrangement for the entrepreneurs who wish to apply for this scheme: 

Khadi and Village Industries Commission (KVIC) will bear a substantial portion of the cost of the project – whether it is for provision of training or to procure machinery. The applicant would have to bear the rest as a loan.

The following table explains the split between KVIC and the Khadi entrepreneur:-

Financial Pattern NE States Other areas
a) KVIC’s Share 90%* 75%
b) Own Contribution or Loan from Bank/Financial Institutions 10% 25%

 

*In case of North Eastern States 90% of project cost will be provided by KVIC up to a project cost of Rs.5.00 lakhs.

Also, there will be a cap on the amount that KVIC would contribute to a specific project. Following is the detailed information for the same:

Type of project KVIC’s contribution
Building/Infrastructure Maximum 15% of project cost.
Plant & Machinery for manufacturing and or testing facilities and packaging Minimum 50% of project cost
Raw material /new design, product Diversification, etc. Maximum 25% of project cost.
Skill upgradation & training  and/ or  Product catalogue Maximum 10% of Project cost.

 

Benefits

How can a Khadi Entrepreneur benefit from this scheme?

In accordance to the RISC scheme, a Khadi entrepreneur can receive assistance with the following activities.

  • Provide testing facilities by establishing laboratory to ensure quality of the products
  • Make available improved machinery/equipment to be utilised as common utility facilities by the nearby unites /artisans to enhance production capacity or value addition of the product
  • Provide attractive and appropriate packaging facilities and machineries to the local unties / artisans for better marketing of their products
  • Make available training facilities to upgrade artisan’s skill in order to increase their earnings.
  • Provide new design or new product, diversified product in consultation with experts /agencies for a value addition of rural manufacturing units
  • Make available raw material support which mainly depend on seasonal procurement
  • Prepare product catalogue

Eligibility Criteria:

What is the eligibility criteria for this scheme?

The Khadi Entrepreneur needs to fall in the following list of Khadi and Village Industry (KVI) to be eligible for the RSIC Scheme

  • Khadi and Poly Vastra post weaving value addition facilities.
  • Herbal products: Cosmetics and Medicines
  • Edible Oil
  • Soaps and detergents
  • Honey
  • Hand Made Paper
  • Food processing
  • Bio-Pesticides, Bio Manure, and Bio-Fertilizer
  • Potteries
  • Leather
  • Woodwork
  • All other V.I. except those which are in the negative list 

Application

How can a Khadi entrepreneur apply for this scheme?

A Khadi entrepreneur can apply for this scheme by visiting/ contacting the nearest RISC.

Click here to gain information about the various KVIC Courses and center details.

Refinance Scheme for Small Road Transport Operators

Operating a road transport service requires sufficient funds which may be difficult to meet for a road transport operator. If you too are planning to open a road transporting service or are already in the business, the government’s Refinance for Small Road Transport Operators scheme is the perfect match for you.

Overview

The Refinance for Small Road Transporter Operators scheme is a government scheme set-up to provide hassle-free funds to road transport operators. Timely availability of funds and assistance on various expenditures helps maintain the smooth functioning of this type of business.

Benefits

How does an operator benefit from this scheme?

This scheme helps an operator meet expenditures on:

  • Cost of chassis
  • Body building of the vehicle
  • Initial taxes or insurance
  • Working capital by providing assistance to refinance the current loans

Eligibility Criteria

What is the eligibility criteria to apply for this scheme?

The following is the eligibility criteria for this scheme:

  • All Small Road Transport Operators as defined in the MSMED Act, 2006
  • An individual or an association desirous of owning new transport vehicle(s), for carrying passengers or goods on hire.
  • The borrower should not have defaulted in repayment of loan of any bank / institution

Application

How can a road transport operator apply for this scheme?

A road transport operator can apply for this scheme through:

  • State Financial Corporations (SFCs)
  • SIDCs
  • Banks

For more information on this scheme click here.