Govt scheme for SME startups


The scheme aims to foster the qualities of entrepreneurship and mentor new entrants on the various aspects of setting up micro and small enterprises

By EB Bureau

Is yours a startup looking for funds or are you planning to plunge into a new venture? Here’s a government scheme that can give you all the support and assistance that you require.

Seeing the limited success of various vocational training workshops and skill development programmes, the Ministry of Micro Small and Medium Enterprises, Government of India, had introduced the Rajiv Gandhi Udyami Mitra Yojana (RGUMY) in 2008. This aimed to foster the qualities of entrepreneurship and mentor new entrants on the various aspects of setting up micro and small enterprises.


Objectives of the scheme

New entrants in business, despite being aware of various schemes and aids from the government, generally face difficulties in availing the entire benefits of these schemes. Completing and complying with various formalities and legal requirements under the different laws and regulations, selecting the appropriate technology, tying up with buyers and sellers, etc, are some of the hurdles faced by new entrants to a market. Hence, in order to resolve these difficulties, RGUMY scheme was introduced to support and nurture potential entrepreneurs, particularly during the initial stages of setting up and managing their enterprises.

For this, the ministry appointed some lead agencies called Udyami Mitras to help and support the new entrants in their businesses. Till now, 650 Udyami Mitras have been empanelled in 28 states and three union territories. The Udyami Mitras have so far registered 19,920 beneficiaries who will receive their support.

How Udyami Mitras can help

The Udyami Mitras provide information, guidance and assistance regarding various promotional schemes of the government; procedural formalities required for setting up and running an enterprise; and in accessing bank credit, apart from trying to ensure that the entire startup process is hassle free.

Right from getting sanctions for power connections to creating Web pages and an email ID, Udyami Mitras are empanelled to do the necessary networking, coordination and follow up with various government departments. Some of the help rendered by Udyami Mitras includes:

  • Identifying suitable projects, products or enterprises and preparing a bankable project report for the business
  • Creation of the proprietorship firm, partnership firm, company, society or self-help group
  • Filing of the memorandum (as prescribed under the MSMED Act 2006)
  • Accessing bank loans, admissible capital subsidies, and other financial assistance that the entrepreneur is entitled to under various government schemes
  • Assistance and support in setting up the workshed or office
  • Selection of appropriate technology and installation of plant and machinery, office equipment, etc
  • Obtaining various registrations, licenses, clearances, ‘no objection certificates’ (NOCs), etc, from the concerned regulatory agencies

No financial aid given to enterprises

Under this scheme, the entrepreneurs do not receive any financial assistance from the Ministry. They are only given assistance by the Udyami Mitras, who, in return, are paid by the Ministry for different services.

Eligibility criteria

Any startup or existing enterprise can avail the benefits of this scheme. Udyami Mitras enrol potential entrepreneurs. Only those beneficiaries will be enrolled, who have already successfully completed or have undergone the Entrepreneurship Development Training Programme (EDP), Skill Development Training Programme (SDP), Entrepreneurship cum Skill Development Training Programme (ESDP) or the Vocation Training Programmes (VT) for at least two weeks. Applicants have to submit their application for enrolment under the scheme, along with their own contribution of Rs 1000, to the concerned Udyami Mitra.



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