Startups, MSMEs looking for govt support? This new programme will incubate ideas, fund them, and more

Credit and Finance for MSMEs: MSME Ministry, in order to support new startups and small businesses, has invited business ideas for incubation under its programme — Ideas for New India Challenge 2020. The one-year incubation programme is focusing on ideas around water recycling technologies, household water recycling, controlling leakage in supply chain, plastic alternatives, e-waste management, crop residue usage, bio-fuel usage, renewable energy, electric vehicles, agro-processing, energy-efficient housing etc. Broadly, the programme has kept 32 sectors under consideration for ideas. The programme will also provide Rs 15 lakh funding to each idea through the incubators wherein it is being incubated. The final selection and announcement of ideas will be between February 22 — 29, 2020.

The government’s flagship initiative for young businesses — Startup India has 74,998 startups registered under DPIIT, 508 incubators, 106 corporate/accelerators and 493 mentors and offers an income tax exemption for three consecutive years, 90-day winding up support, along with 80 per cent rebate on payments etc. The budget presented recently by the Finance Minister also had a host of sops for startups and small businesses as well. Nirmala Sitharaman had proposed a seed fund for startups to support ideation and development of early-stage startups. For MSMEs, the minister had announced increasing the turnover limit from Rs 1 crore to Rs 5 crore for MSMEs to operate without the need for their accounts to be audited.

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Even as the government has been taking steps to support MSMEs with their credit needs and relaxed compliance measures, the lack of bank credit has remained a concern. The growth in gross bank credit to micro and small enterprises had remained contracted for November 2019 as well in the current financial year, data from the Reserve Bank of India showed. From minus 0.1 per cent in April, growth in credit deployment to MSEs has remained negative throughout FY20 till November during which the contraction was 0.9 per cent. The November bank credit stood at Rs 10.57 lakh crore — 6.2 per cent up from Rs 9.95 lakh crore November FY19. The amount for October FY20 was Rs 10.53 lakh crore, according to RBI’s January 2020 bulletin.

Source: Financial Express