Why Start-ups are important for economic growth of a nation?
There is no doubt that start-ups are important for economic growth of a nation. The role of start-ups in economic prosperity is enhancing in today’s world. One of the main advantages of start-ups is that it creates new jobs. Global data shows that start-ups are creating more jobs in our nation than the large companies or enterprises.
As of now, many of the start-ups have introduced latest technologies like Internet of Things, Artificial Intelligence, and Robotics etc. Most of the technology giant companies outsource their tasks to startups now days. It will also help to increase the cash flow of startups. But every startups needs to deliver quality to their consumers in order to sustain their business. Then only these startups will grow and succeed. So, the role of startups is important to our society to develop our nations. That means it is necessary to develop an entrepreneurship culture in our country for more startups.
Since the number of startups is increasing, competition between them are also increasing. But I would say that, a healthy competition is important for startups and consumers to curate the startup.
Main Roles of Startups to increase economic growth
Startups will creates more jobs: Yes. If you are going to become an entrepreneur then you can create more jobs. Thus, the rate of unemployment in our nation also decreases. So, employment creation is one of the main advantages from startups.
Creation of wealth: Since entrepreneurs are attracting investors by investing their own resources, the people of the nation would get benefit when startups grow. Since the money is sharing with the society, wealth is creating within the nation.
Better standard of living: Startups can implement innovations and technologies to improve the living of people. There are many startups who is working for rural areas to develop the community.
Better standard of living: Startups can implement innovations and technologies to improve the living of people. There are many startups who is working for rural areas to develop the community.
Startup India Schemes: India is supporting and encouraging startups to stand up for developing our nation. There are many innovative products and services are implementing by young entrepreneurs of our nation. That is why Indian government has announced schemes for promoting startups. Startup India Schemes are helping many budding entrepreneurs to make their dreams come true and also helping to create more jobs from startups. So if you have a startup dream you should aware about the latest schemes and it will help us to boost the entrepreneurial journey.
Conclusion: Startups can change the world and in coming years more and more startups will grow with innovation and creativity. Entrepreneurship is the only way to enhance the economic growth of a nation. And a small idea can be termed into big innovative solution which can change your future. So, if you have an idea, don’t block your dreams because of fear of failure and taking risk. Develop your idea into startup and contribute to the growth of our nation. Now we can conclude that startups are important for economic growth of a nation.
Needless to say, the government is all for it, and has launched a variety of startup schemes and loans to encourage more and more people to start their own businesses. Startups, if successful, act as magnets to attract foreign investments and boost the economy. Also, with the ever-increasing demand of consumer products, manufacturing them within the country seems more feasible and lucrative. Take smartphones, for example. Multiple smartphone industries have come up in the past year, and India is indeed becoming a hub of mobile manufacturing units. Such units don’t just save costs but generate tons of jobs.
1) MUDRA – The Micro Units Development and Refinance Agency or MUDRA, is a flagship program by the government of India to provide funds to micro and small enterprises. What sets MUDRA apart from other loan schemes is the fact that no collateral is required to avail this loan. It is applicable for manufacturing, trading, and even allied agricultural services. It has 3 modules, Shishu (loan up to 50,000), Kishor (Loan between 50,000 and 5 lakh) and Tarun (Loan between 5 lakh and 10 lakh).
2) NABARD – The National Bank for Agriculture And Rural Development, or NABARD, for short, is primarily aimed towards providing credit benefits to agriculture as well as other cottage and village industries. It also provides finance to lending institutions in villages. With schemes for food processing plants and integrated rural development, NABARD works in conjunction with the RBI to implement and regulate financial assistance in rural areas. Its Dairy Entrepreneurship Development scheme offers up to 90% of the project cost (minimum 10 lakhs to maximum 150 lakhs) to budding entrepreneurs.
3) Credit Guarantee Scheme – The CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) was set up by the Government of India to provide business loans to micro and small industries, with zero collateral. This means that new and upcoming startups can avail loans at highly subsidised interest rates without providing any security. Working along with SIDBI (Small Industries Development Bank of India), the government provides a maximum amount of up to 100 lakhs under this scheme, for boosting new enterprises as well as rehabilitating existing ones. Primarily for manufacturing units, this loan can be availed in the form of working capital or term loan.
3) Credit Guarantee Scheme – The CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) was set up by the Government of India to provide business loans to micro and small industries, with zero collateral. This means that new and upcoming startups can avail loans at highly subsidised interest rates without providing any security. Working along with SIDBI (Small Industries Development Bank of India), the government provides a maximum amount of up to 100 lakhs under this scheme, for boosting new enterprises as well as rehabilitating existing ones. Primarily for manufacturing units, this loan can be availed in the form of working capital or term loan.
6) AIC – Headed by the Atal Innovation Mission, the Atal Incubation Centres provide grant-in-aid of Rs. 10 Cr to every AIC. The duration of the grant is a maximum of 5 years. Set up under the NITI aayog, the purpose of AICs will be to provide financial aid and infrastructure assistance to different startups in sectors like chemicals, technology hardware, healthcare & life sciences, aeronautics/aerospace & defence, agriculture, AI, AR/VR (augmented + virtual reality), automotive, telecommunication & networking, construction, design, non-renewable energy, renewable energy, green technology, fintech, Internet of Things, nanotechnology, and food & beverages, among others. Conducting training and entrepreneurship workshops, organizing inspirational programs, enabling access to necessary infrastructure, prototyping or research facilities, as well as creating a group of mentors to guide the entrepreneurs, are some of the tasks that an AIC is expected to perform.
8) SMILE – The SIDBI Make in India Soft Loan Fund for Micro, Small, and Medium Enterprises provides soft loans to MSME units at reasonable terms, to meet the debt-equity ratio of a unit or to help in its growth and expansion. The loan is applicable for a maximum period of 3 years. The amount disbursed varies on the category the unit falls under, with 10% or a maximum of 20 lakhs for General category, and 15% or a maximum of 30 lakhs for SC/ST, PwD, and women.
9) Loan for Rooftop Solar PV Power Projects – Headed by the Indian Renewable Energy Development Agency (IREDA), this scheme promotes renewable energy development by providing support for solar PV projects on rooftops. The IREDA will provide 70% of the project cost, while the entrepreneur will contribute the remaining 30% of the amount. In some projects, where the unit has great track record, higher benefits, and more productivity, the IREDA may extend the loan amount to 75% of the project cost. The loan has to be repaid in a maximum of 9 years.
10) M-SIPS – The Modified Special Incentive Package Scheme provides capital subsidies to manufacturing and electronic units in sectors of technology hardware, IoT, automotive, renewable and non-renewable energy sources, nanotechnology, green technology, and aerospace and defence industries. Under this scheme, there’s a provision for 20% capital subsidy in SEZ, and 25% in non-SEZ, for business units in manufacturing and electronics.
With these government schemes for startups, India is poised to see a sizeable increase in the number of startup ventures.
Disclaimer: All the views in the Blog is personal of the author not attributing to anyone.
