Government Policies for Promoting Entrepreneurship in India | Psychology for UPSC Optional (Notes) PDF Download

Introduction

Entrepreneurship in India is a tale of paradox and innovation. Despite facing fundamental limitations, Indian entrepreneurs serve as role models, inspiring others to achieve success and drive innovation. The country's entrepreneurial spirit, coupled with the growth of family businesses, has significantly transformed the Indian economy and business environment. Women in India have also emerged as leaders, overcoming numerous challenges to attain financial independence and respected positions. In order to foster entrepreneurship, the government has implemented various policies that offer benefits and concessions for financial assets, particularly in incubation centers. This article delves into the government's initiatives and programs aimed at promoting entrepreneurship in India.

Atal Incubation Centre (AIC)

Atal Incubation Centre (AIC) is a leading program designed to cultivate India's entrepreneurial and innovative culture. As an umbrella organization, AIC fosters innovation, transforms the entrepreneurial ecosystem, and provides a platform for collaboration among diverse stakeholders. AIC creates policies and programs that stimulate innovation across various economic sectors. Start-ups incubated at AIC gain access to state-of-the-art physical infrastructure, capital equipment, and operating facilities, nurturing their growth and success.

Refinancing by NABARD

In response to the post-Covid era challenges, the National Bank for Agriculture and Rural Development (NABARD) has introduced three specific refinance schemes. These schemes aim to address the issue of rural migration, support agriculture, and bolster the rural sector. One such scheme focuses on transforming potential primary agricultural cooperatives (PACs) into multi-service centers (MSCs). Over a period of three years, starting in 2020, this initiative aims to enhance infrastructure assets and expand business portfolios in alignment with the needs of members. Additionally, NABARD has introduced a long-term refinance program to support micro food processing activities, creating stable job and livelihood options for rural youth affected by the Covid-19 pandemic.

Coir Udyami Yojana

The Coir Udyami Yojana, overseen by the Ministry of Micro, Small, and Medium Enterprises (MSME), aims to promote the sustainable growth of the coir industry. Under this credit-related subsidy program, coir units with project costs up to Rs 10 lakh, along with one cycle of working capital (maximum 25% of the project cost), are eligible for financial support. This program extends its benefits to self-help groups, businesses, non-profit organizations, and institutions covered by the Society Registration Act of 1860, including cooperative societies, joint liability groups, and charitable trusts.

MUDRA Loans

The Pradhan Mantri Mudra Yojana (PMMY) program facilitates loans up to 10 lakh rupees to non-corporate, non-farm small and micro enterprises. These loans, known as Mudra loans, are made available through commercial banks, Regional Rural Banks (RRBs), small finance banks, cooperative banks, Microfinance Institutions (MFIs), and Non-Banking Financial Companies (NBFCs). The program offers three loan products—Shishu, Kishore, and Tarun—based on the developmental stage and financial requirements of the beneficiary, serving as a benchmark for their future growth.

MSME Market Development Program

The MSME Market Development Program (MSME-MDA) forms an integral part of the comprehensive policy package for Micro, Small, and Medium Enterprises (MSMEs). It aims to enhance the participation of representatives from participating units. The program has recently undergone modifications and now encompasses three formats: international exhibition participation for small and micro manufacturing businesses registered with the District Industries Centre (DIC), financial support for implementing barcoding adhering to global standards (GS1), and access to financial aid through the office of the Development Commissioner for Micro and Small Enterprises (DC MSE).

Policies for Women Entrepreneurs

Recognizing the unique challenges faced by women entrepreneurs, the government has introduced several policies and initiatives to empower them. These include:

• Mudra Yojana Scheme: The Mahila Loan Yojana under Mudra Yojana enables women from all walks of life to apply for loans. Aspiring female entrepreneurs can access loans to support various ventures, including production and manufacturing companies such as crafters, weavers, and artisans. Loans are also available for service-oriented businesses, ranging from tailoring and phone repair to photocopying, auto repair, beauty salons, and more.
• Women's Entrepreneurship Platform: The Women's Entrepreneurship Platform (WEP), launched by NITI Aayog in collaboration with SIDBI (Small Industries Development Bank of India), provides a supportive environment for aspiring and established women entrepreneurs. WEP operates on three pillars—Iccha Shakti (encouraging business launch), Gyaan Shakti (educating women entrepreneurs and supporting their ecosystem), and Karma Shakti (providing practical assistance for business owners' launch and expansion).
• Stree Shakthi Package: The Stree Shakthi Package offers loans specifically for businesses operated by women entrepreneurs. The MSME Department of India's suggested definition of women-owned businesses encompasses small-scale industrial units, industry-related services, or business enterprises managed by one or more women entrepreneurs, either individually or as partners, with a share capital of not less than $51.

Conclusion

The Indian government's initiatives to promote entrepreneurship are geared towards addressing the lack of funds that often hinder aspiring entrepreneurs. Through schemes like Mudra loans, Coir Udyami Yojana, and many others, the government aims to encourage more youth to join the entrepreneurial mission and contribute to the nation's progress. Special attention is given to supporting women entrepreneurs, recognizing their unique challenges and providing financial aid across various sectors. With these policies, the government is fostering a conducive environment for entrepreneurship and innovation, facilitating economic growth and empowerment.