Government schemes for startups in India can give you seed grants, collateral-free loans, credit guarantees and indirect access to venture capital. The problem is that scheme details change often, and many websites still quote limits and deadlines that are a year or two out of date. Before you plan your finances around a scheme, you need to know whether it is open, who it is for and how money actually reaches you.
This guide covers the six schemes first-time founders ask about most: the Startup India Seed Fund Scheme, the Fund of Funds for Startups, the Credit Guarantee Scheme for Startups, PM MUDRA Yojana, Stand-Up India and PMEGP. For each one we explain what you get, who qualifies, how to apply and its current status as of November 2026, with links to the official source.
Some of these schemes recently reached the end of their approved periods, and others were expanded. Where we found no official update, we say so.
Key takeaways
- The Startup India Seed Fund Scheme offers up to ₹20 lakh in grants and up to ₹50 lakh in debt through incubators, but its ₹945 crore corpus is fully committed and its final extended application deadline was 31 May 2026.
- The government notified a second ₹10,000 crore Fund of Funds in April 2026; it invests through SEBI-registered AIFs, not directly in startups.
- The Credit Guarantee Scheme for Startups now covers loans of up to ₹20 crore per borrower, with a lower 1% annual fee for 27 champion sectors.
- MUDRA loans go up to ₹20 lakh, with the Tarun Plus category open to borrowers who have repaid an earlier Tarun loan.
- Stand-Up India’s approved period ran until March 2025 and PMEGP’s until March 2026; confirm their current status with your bank or the official portal before applying.
- Many states run their own startup policies, which can be combined with central schemes.
Two things to check before you pick a scheme
1. Are you DPIIT-recognised? The Seed Fund Scheme and the Credit Guarantee Scheme for Startups both require Startup India recognition, and AIFs backed by the Fund of Funds invest in recognised startups. Recognition is free and done online.
2. What is your legal structure? MUDRA is for non-corporate micro enterprises and PMEGP is for individual entrepreneurs, so a private limited company will usually look elsewhere, such as the startup credit guarantee or the CGTMSE scheme for micro and small enterprises.
Comparison table: government schemes for startups
| Scheme | Who it is for | What you get | How to apply | Official link |
|---|---|---|---|---|
| Startup India Seed Fund Scheme (SISFS) | DPIIT-recognised, tech-led startups incorporated not more than 2 years before applying | Grant up to ₹20 lakh; up to ₹50 lakh as convertible debentures or debt | Online on the SISFS portal, choosing up to three incubators (check whether applications are open) | seedfund.startupindia.gov.in |
| Fund of Funds for Startups (FFS) and FFS 2.0 | Startups seeking equity from venture funds | Indirect: SIDBI commits capital to SEBI-registered AIFs, which invest in startups | Pitch to AIFs supported by the scheme; startups do not apply to SIDBI | sidbivcf.in |
| Credit Guarantee Scheme for Startups (CGSS) | DPIIT-recognised startups not in default | Guarantee to your lender on loans of up to ₹20 crore per borrower, making collateral-free credit easier | Through a member bank, NBFC or AIF | startupindia.gov.in |
| PM MUDRA Yojana (PMMY) | Non-corporate, non-farm micro enterprises in manufacturing, trading, services and allied agriculture | Collateral-free loans up to ₹20 lakh in four categories | At a bank, RRB, small finance bank, NBFC or MFI branch, or online via Udyamimitra | mudra.org.in |
| Stand-Up India | SC/ST and women entrepreneurs setting up a first (greenfield) enterprise | Composite bank loan of ₹10 lakh to ₹1 crore | Through a scheduled commercial bank, Stand-Up Mitra or JanSamarth (confirm current status) | standupmitra.in |
| PMEGP | Individuals above 18 setting up new non-farm micro enterprises | Bank loan with margin money subsidy of 15% to 35% of project cost | Online on the KVIC PMEGP e-portal (confirm current status) | kviconline.gov.in |
1. Startup India Seed Fund Scheme (SISFS)
SISFS targets the hardest stage to fund: an idea or prototype that investors and banks will not back yet. DPIIT funds selected incubators, which select and fund startups.
What you get. According to the scheme guidelines, up to ₹20 lakh as a grant for proof of concept, prototype development or product trials, and up to ₹50 lakh as convertible debentures or debt for market entry and scaling. Grants are released in instalments linked to milestones.
Who qualifies. The startup must be DPIIT-recognised, incorporated not more than two years before applying, use technology in its core product or business model, have Indian promoters holding at least 51%, and not have received more than ₹10 lakh under other central or state schemes.
Current status. The scheme began on 1 April 2021 with a ₹945 crore corpus. By April 2026, the entire corpus had been committed through 219 incubators, which had approved over ₹605 crore for more than 3,400 startups, and the scheme had been extended to allow approved support to be paid out, according to PIB. SIDBI notes that the portal listed 31 May 2026 as the final extended deadline and that the scheme should not be treated as open without a new notification. Check the SISFS portal before you prepare an application.
2. Fund of Funds for Startups (FFS) and FFS 2.0
The Fund of Funds does not give money to startups directly. SIDBI commits capital to SEBI-registered Alternative Investment Funds, and those funds invest in startups. The Startup India schemes playbook (June 2026) notes that supported AIFs must invest at least twice the FFS contribution in startups.
Scale so far. The original fund had a ₹10,000 crore corpus. By the end of 2025-26, over ₹7,000 crore had been disbursed to more than 135 AIFs, which had invested over ₹26,900 crore in more than 1,420 startups.
FFS 2.0. In April 2026 the government notified Startup India Fund of Funds 2.0 with another ₹10,000 crore. It will prioritise AIFs backing deep tech startups, early growth-stage startups through smaller funds, and technology-driven manufacturing, along with sector-agnostic funds.
How to benefit. Find out which VC funds have FFS backing in your sector and pitch to them as you would to any investor.
3. Credit Guarantee Scheme for Startups (CGSS)
Banks hesitate to lend to young startups without collateral. CGSS addresses this by guaranteeing part of the loan to the lender, through the National Credit Guarantee Trustee Company (NCGTC).
- Cover limit: up to ₹20 crore per borrower, doubled from ₹10 crore under a revision notified in May 2025.
- Coverage: 85% of the amount in default for loans up to ₹10 crore, and 75% for loans above ₹10 crore.
- Fee: the annual guarantee fee for startups in the 27 champion sectors under Make in India was cut from 2% to 1%.
- Lenders: scheduled commercial banks, financial institutions, RBI-registered NBFCs that meet rating and net-worth conditions, and SEBI-registered AIFs.
- Eligible credit: working capital, term loans, venture debt, debentures and similar debt.
You do not apply to NCGTC yourself. Ask your lender whether it is a member institution and whether it will seek CGSS cover on your loan.
4. PM MUDRA Yojana (PMMY)
MUDRA loans are for small, income-generating businesses: shops, workshops, service providers, food units and similar. MUDRA itself does not lend; it refinances banks, NBFCs and MFIs that do. Loans are collateral-free. The official site also warns that MUDRA engages no agents or middlemen.
| Category | Loan amount |
|---|---|
| Shishu | Up to ₹50,000 |
| Kishor | Above ₹50,000 and up to ₹5 lakh |
| Tarun | Above ₹5 lakh and up to ₹10 lakh |
| Tarun Plus | Above ₹10 lakh and up to ₹20 lakh |
The Tarun Plus category was announced in the Union Budget 2024-25 and is open to entrepreneurs who have taken and repaid a Tarun loan, according to PIB. Loans up to ₹20 lakh are covered by the Credit Guarantee Fund for Micro Units. The scheme has sanctioned over 57 crore loans since 2015, as noted in a PIB release marking 11 years of PMMY.
Apply at a lending branch or online through Udyamimitra, with a simple business plan and KYC ready.
5. Stand-Up India
Stand-Up India was launched in 2016 to help SC/ST and women entrepreneurs start their first enterprise. Every bank branch was expected to lend to at least one SC/ST borrower and at least one woman borrower.
- Loan: ₹10 lakh to ₹1 crore as a composite loan (term loan plus working capital) for a greenfield project in manufacturing, services, trading or allied agriculture.
- Ownership: in a company or firm, at least 51% of the shares and a controlling stake must be held by an SC/ST or woman entrepreneur.
- Own contribution: at least 10% of project cost; repayment over up to seven years with a moratorium of up to 18 months, as per the Department of Financial Services.
Current status. The Department of Financial Services lists the scheme as running up to 31 March 2025, and a June 2026 PIB release described it as having remained operational until March 2025. The Union Budget 2025-26 announced a new scheme offering term loans of up to ₹2 crore to 5 lakh first-time women, SC and ST entrepreneurs, drawing on Stand-Up India’s experience; the latest official update we found said its approval note was still being prepared. Ask your bank which option is currently available.
6. Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP, run by the Khadi and Village Industries Commission (KVIC), combines a bank loan with a one-time “margin money” subsidy for new micro enterprises. Existing units are not eligible, except for a second loan to upgrade.
- Project cost: up to ₹50 lakh for manufacturing and ₹20 lakh for service units.
- Own contribution: 10% of project cost for the general category, 5% for special categories, according to the PMEGP FAQs.
- Training: an entrepreneurship development programme is compulsory for projects above ₹2 lakh.
| Applicant category | Subsidy in urban areas | Subsidy in rural areas |
|---|---|---|
| General | 15% | 25% |
| Special (including SC, ST, OBC, women, transgender, persons with disabilities, NER, aspirational and border districts) | 25% | 35% |
Current status. The scheme was approved for 2021-22 to 2025-26 with an outlay of ₹13,554.42 crore, according to PIB. We could not find an official notification extending it beyond March 2026, so confirm on the KVIC portal or with your bank whether new applications are being processed.
Other schemes worth knowing
- CGTMSE: for micro and small enterprises, including companies, the guarantee ceiling was raised from ₹5 crore to ₹10 crore for guarantees approved from 1 April 2025, as per PIB.
- SME Growth Fund: announced in the Union Budget 2026-27, with the Cabinet approving a ₹10,000 crore commitment for an equity fund for high-potential SMEs, according to a PIB backgrounder from October 2026. It suits established small businesses more than early startups.
- Sector schemes: ministries such as food processing, agriculture, defence, space and telecom run their own grants and challenges. The June 2026 Startup India schemes playbook lists many of them in one place.
State startup policies
Most states and union territories run their own startup policies, often through a state startup mission. Support can include seed grants, incubation rent subsidies, patent cost reimbursement and incentives for women-led or rural startups, usually alongside central schemes. Read your state’s current policy document, because benefits and eligibility vary widely and change with each policy cycle.
Frequently asked questions
Can I get a government grant for my startup?
Grants are limited. The Seed Fund Scheme offered up to ₹20 lakh through incubators, and PMEGP gives a margin money subsidy with a bank loan. Most other central schemes are loans, guarantees or indirect equity.
Is the Startup India Seed Fund Scheme still accepting applications?
Its ₹945 crore corpus is fully committed, and SIDBI says the portal listed 31 May 2026 as the final extended deadline. Treat it as closed unless the SISFS portal announces a new window.
Can a private limited company get a MUDRA loan?
MUDRA is meant for non-corporate micro enterprises such as proprietorships and partnerships. A private limited company should look at bank loans backed by CGTMSE or, if DPIIT-recognised, the Credit Guarantee Scheme for Startups.
Do I need collateral for a startup loan?
MUDRA loans are collateral-free. Under CGSS and CGTMSE, the guarantee given to your lender reduces the need for collateral, though the final decision is the lender’s. Under Stand-Up India, banks decided between collateral and a guarantee.
Do I need DPIIT recognition for these schemes?
Yes for the Seed Fund Scheme and the Credit Guarantee Scheme for Startups, and AIFs backed by the Fund of Funds invest in recognised startups. MUDRA, Stand-Up India and PMEGP do not require it.
Government schemes can stretch your runway and lower borrowing costs, but they work best as one part of a funding plan. Shortlist the two or three that fit your stage and structure, confirm their status on the official portal, and keep your documents ready.
This article is for general education and is not legal or financial advice. Scheme terms change often, so please confirm the details with a CA, CS or lawyer and on the official scheme portal before you apply.