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A startup is a comparatively new  small company or business which is initiated by business person or innovators of presenting a unique products and services. A Startups typically operate in a dynamic and rapidly evolving environment, seeking to scale their operations and grow their business, often with a focus on innovation and disruption of existing industries. Despite the presence of a foundation, for startups in India they encounter various challenges that hinder their progress. These challenges include difficulties in establishing and expanding startups navigating environments hiring suitable talent securing funding and facing stringent policies for emerging businesses. To solve these hurdles the government of India recently launched the Startup India initiative. This program acknowledge competent companies to allowed as startups by the ministry of “Department for Promotion of Industry and Internal Trade” (DPIIT) granting them access to tax benefits simplified compliance procedures intellectual property rights support and overall development opportunities. The initiative also aims to promote entrepreneurship among women and marginalized communities such as scheduled castes and tribes. Additionally there are government schemes and skill development programs available that can benefit aspiring entrepreneurs as well as existing startups. This paper specifically focuses on discussing the challenges faced by startups and explores the impact of these schemes and development programs introduced by the government in mitigating risks and fostering growth, for startups.

1.     To know the various financing schemes for startups in India.

2.     To explore the challenges of startups in India.

Kumar and Rao (2015) The research intends to establish a theoretical framework for assessing the financial performance os small and medium sized enterprises (SMEs) by investigating the elements that influence their financing choices.This study adds value to existing literature by tackling the prevalent financing challenges faced by SMEs and strives to pinpoint the issue of accessing financial resources within the context of determining the capital structure of SMEs.

Abe,et.al. (2015) study highlights the significant limitations posed by financing for MSMEs due to various factors. Numerous MSMEs struggle with the efficient management of working capital, and the presence of information imbalances of banks and MSMEs hampers the credit applications and endorsement procedures. There's an anticipation that policies should be designed to improve the chances of growth and survival for startup enterprises

Nikaido,et.al. (2015) they explore the consequence of enterprise-specific element on the ability of small businesses in India to obtain formal credit. They used a probability sample  for their analysis. The findings suggest that elements such as the size of the enterprise, the educational level of the owner, registration status, and engaging in diversified activities are all linked to a positive likelihood of gaining access to financial institutions.

Singh and Wasdani (2016) the issue of financing for micro, small and medium enterprises has been a matter of concernment for various parties, like business person, banks, and the government. The research revealed that the primary obstacles leading to the underusage of formaizedl financial channels were the absence of  collateral and a lack of banking knowledge among new business person.

Klonowski D (2016) study delves into the monetary hurdles encountered by  firms in the Poland. It underscores the existence of significant liquidity shortfalls within the SMEs sectosr in the Poland. The study provides three policies suggestions aimed at addressing these working gaps in the SMEs sector, that encompass research and informal dialogue, as well as a comprehensive package of capital and expertise.

This article is based on information provided in ministry websites and various other websites. This paper is totally based on literature based analysis. Hence, based on secondary data.

Challenges of Startups

Marketing, financial  and other challenges are the three most important barriers faced by startups these days.

Financial challenges

1. Capital raising

2. Cash flow management

3. Budgeting

4. Revenue generation  

5. Regulatory compliances

Marketing challenges

1. Brand Awarness

2.  Target audience identification

3. Competition

4. Content generation

5.  Marketing technology

6.  Adaptation to market changes

7. Search engine optimisation

Other Challenges

1. Intellectual property protection

2. Customer support

3. Networking and partnership

4. Team budgeting

5. Product development

6. Market research

6. Government startup scheme in india

1. Atal Innovation Mission

In the year 2016, NITI Aayog introduced the startup India scheme known as Atal innovation mission. The aim of this mission is to encourage innovation by implementing programme and policies that facilitate growth in sectors of the economy. As a part of this startups initiative. AIM provides around rs 100cr, in funding to selected companies over a span of five years.

2. Startup India Seed Fund Scheme

In January 2021, the Indian government launched the startup India seed fund scheme with the aim providing assistance to startups, in their stages. Startups will receive grants of up to rs 20 lakh for the development of concept or demonstration and up to rs 50 lakh for the expansion of their products or services.

3. Startup India Initiative

As of june 2021, the 50000 companies have been acknowledged through this startup program in India offering tax advantage to entrepreneurs for over five years. Furthermore, it has also generated 5,50,000 job opportunities.

4. Atmanirbhar Bharat App Innovation Challenge

In july 2020 a new program was launched by the government to promote collaboration among startups and encourage the development of solutions that are uniquely crafted in India. The aim is to create innovations that will benefit both people within the country as the around the world.

5. eBiz portal

It is developed by Infosys which helped to modernise the nation and give out a important point for communication for all business stakeholder and businessman in India. eBiz is the first online platform for government to business collaboration.

6. Software technology park (STP)

The software technology park is a procedure which is hundred percent export-driven to increase and export computer software and appliances through physical media or communications.

7. Dairy Processing And Infrastructure Development Fund (DIDF)

Government declared the formation of the “dairy processing and infrastructure development fund” with a outlay of rs 11,184 crores. It helps dairy cooperative sustain their competition and get the lifelong benefit of farmers.

 8. MUDRA Bank

“The Micro units development refinance agency”, (MUDRA), aims to support the growth of businesses, in areas by increasing access to loans. The government initiatives focuses on assisting enterprises that aspire to expand under the MUDRA scheme banks provide loans ranging upto 10 lakhs for nonfarm microenterprises and noncorporate small businesses .These loan categories are known as Tarun, Shishu and Kishore.

9. Multiplier Grants Scheme (MSG)

The multiplier grants scheme organised by the department of electronics and information technology, promote research and development collaborate with academics  and the technical industries.

10”.Credit Guarantee Fund Trust For Micro And Small Enterprises”

This goal of this scheme is to provide loan at huge discounted interest rates without any collateral. The government has decided to perform assignment with SIDBI to allow maximum loan of rs.100 lakhs.

Even though startups in India has affronted a various barriers in the past. The new scheme has developed a drastic transformation in startups lives. The newly launched scheme and several development initiatives certainly make a massive transformation and decreases the financing, marketing and other challenges. In the recent years startups would be a gamechanger for the national development.

1. Kumar, Rao (2015) A Conceptual framework for identifying financing preferences of SMEs: Small Enterprise Research (May).

2. Abe, Troilo, Batsaikhan (2015) Financing small and medium enterprises in Asia and the pacific: Journal of Entrepreneurship and Public Policy,Vol.4,Issue1.

3. Nikaido, Pais, Sarma(2015) What hinders and what enhances small enterprises’ access to formal credit in India?: Review of Development Finance 5,43-52.

4. Singh, Wasdani(2016) Finance for Micro, Small and Medium-Sized Enterprises in  India: Sources and Challenges: Asian development Bank Institute, Paper 581.

5. Klonowski D (2017) Liquidity gaps in financing the SME Sector in an emerging market: evidence from Poland: International Journal of Emerging Markets,Vol.7,Issue3.

6. https://fi.money.com