IndiaFilings » Learn » Does the government give funds to startups?

Does the government give funds to startups?

Does the Government Give Funds to Startups?

Does the Government Give Funds to Startups?

The easy availability of financing is a critical issue for entrepreneurs looking to expand their Startups. Due to a lack of funding, many business concepts stay on the ground. To address this issue, the Indian government has established a few Schemes through which the government provides financial aid to entrepreneurs. Startups can use these funds for research and development, marketing, and other activities to help them grow their business. This article will help Startups to learn about Does the government give funds to startups?

Startup India Seed Fund Scheme (SISFS)

To build a conducive startup ecosystem, DPIIT has created Startup India Seed Fund Scheme (SISFS) with an outlay of Rs. 945 Crore. Financial assistance of up to Rs. 50 lakh will be given to the startups at an early stage through the incubators.

The SISFS aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.

By providing seed funding and other support services, SISFS helps startups overcome their initial challenges so that they can go on to become successful businesses.

For more details on Startup India Seed Fund Scheme (SISFS), click here

SIDBI Fund of Funds Scheme

The SIDBI Fund of Funds Scheme (FoFS) is a government-backed venture capital fund that aims to promote entrepreneurship and innovation in India. The scheme was launched in 2016 by the Small Industries Development Bank of India (SIDBI). It provides financial support to venture capital funds, which invest in startups and small businesses. The FoFS helps entrepreneurs access long-term financing and mentorship and build networks with other investors. It also encourages angel investors to invest in startups, providing them with the necessary resources to grow their businesses. The FoFS has been instrumental in creating a vibrant startup ecosystem across India and helping entrepreneurs realize their dreams.


Ministry of Micro, Small and Medium Enterprises (MSME) also entrusted SIDBI with the management of ASPIRE Fund with a corpus of  310 crores to support various AIFs, which in turn would invest twice SIDBI’s contribution in different MSME / startup businesses, including rural and agro space.

ASPIRE FUND shall target to achieve the below objectives through its contribution to Funds:

  • Support startups / early-stage enterprises in innovation, entrepreneurship, and forward-backward linkage with multiple manufacturing and service delivery chains.
  • Accelerator support in the agro-based Industry verticals and sectors that would galvanize the rural economy.

India Aspiration Fund IAF

India Aspiration Fund (IAF), set up by SIDBI with the support of RBI according to a budget announcement, is an Rs.2000 crore fund introduced by SIDBI to promote and accelerate equity and equity-linked investments in Startups and MSMEs.

Pradhan Mantri Mudra Yojana

Under this scheme, any small business person can borrow up to Rs.10 lakhs from different mutual funds, banks, and financial institutions. Collateral is optional for Small Micro enterprises.


The primary objective of this scheme is to promote the growth of software product companies in India. It is one of the initiatives of the central government to boost entrepreneurship in India. Under this scheme, the startup can get government funding up to Rs.40 Lakh.

There are plenty of schemes made for specific sector startups. Visit Invest India or Startup India portals and navigate the information in length, which will give you further clarity on the various government schemes launched by the Indian government to support startups.