The Stand Up India Loan Scheme Yojana
The “Stand up India” is an initiative for the schedule caste and backward tribes. It aims at providing financial aid to the lower sections of our country. Stand up India also promotes employment and entrepreneurship to the lower sections and women. The loan amount or aid varies between Rs. 10 lakh to Rs. 1 crore. This initiative will enable the underserved section to utilize the institutional credits in the form of bank loans. Moreover, with the Stand Up India initiative, the policy domain of each state will also be restricted.
The financial aid is for the entrepreneurs to set up their business and also a RuPay debit card will be issued to them for withdrawal of money or capital for operations. The scheme will help in growing the economy of the country and people can benefit from it by utilizing these funds for establishing their ventures. Further, there are many other factors like legal and operation norms and laws that hamper the operations of the business. This scheme will help to eliminate all these hurdles for the entrepreneurs as well.
How to enroll/apply Stand Up India Loan
The entrepreneurs can register online using the web portal or the mobile application that will be launched in April 2016. Moreover, a self- certification system will also be launched. The applicants can fill the application form with all the required data, which can be processed further. They need to produce their plan of action along with the required legal documents to validate the requirement.
Eligibility Criteria for Stand Up India Loan
The government is willing to aid most of the applicants for starting up their business. But at the same time it is not possible for the government to provide loans to all the entities applying for the same. Moreover, it is also very important for the borrowers to abide to the guidelines of the program and operate accordingly. They should examine the feasibility of the program for their business and operations. The government encourages the people with unique and planned ideas that can be shaped for success.
Following are the eligibility criteria for applying for the Stand Up India:
- The company must be a private limited/LLP or a partnership firm.
- The company should be less than 5 years in age.
- The turnover of the firm should not be more than 25 crores
- The company should be dealing with any commercial or innovate consumer goods. For the same an approval of the DIPP is also required.
- The company should have patents granted.
- Also few letters need to be also produced at the time of application.
Benefits of Stand Up India
The basic aim of the initiative is to provide expertise and encourage new entrepreneurs so as to minimize unemployment. Following are the benefits for angel investor, incubator and consultant.
If you are an angel investor then Start up India gives you the right platform where you get professional advice, time, and knowledge about laws and also they would be there to aid you for two years during the initial phase of startup. Moreover, various they also provide contacts so that the entrepreneurs can utilize them for financial help.
If you are an Incubator then the initiative provides you with the right coaching and knowledge. They can guide you with expertise knowledge to shape your ideas and thoughts into a definite shape and structure.
They also provide post set up aid to the consultants. For mature stage social ventures they also provide help for them to grow and expand in their domain.
Moreover, another benefit for the entrepreneurs is that they do not have to worry much about how to pay back the amount that they have taken for the loan. They need to pay back all that money in a span of seven years, which does not lay any stress of repayment on them. Further, it is the decision of that person to decide what amount needs to be paid back per month.
Coverage in Stand Up India
As a part of media awareness and reporting the following initiatives will be taken up:
A Startup India Twitter Handle
An official website and application for the initiative to create better awareness about Stand Up India.
Moreover, the motivating stories will also be blogged every day for motivating others.
A dedicated Facebook page will also be set- up for social awareness about the initiative.
Tax Benefits in Stand Up India
The applicants will get 80% rebate after filling the patent application form. This can be only filled by startups and the benefits are also more for them as compared to other companies.
There is also an inclusion of Credit Guarantee Fund and the entrepreneurs enjoy relaxation in Income tax at least for the first three years. There will be complete relaxation for the entrepreneurs for the Capital Gain Tax. Moreover, for the entities who qualify the program will further enjoy benefits like redemption of tax on the profits earned. This is to ease the entities during the initial startup phase and that there is no burden of paying heavy costs for taxes.
Stand Up India Loan in SBI
SBI is dedicated partner for the Stand Up India scheme and is providing loans to the young entrepreneurs. SBI will be setting up include branches specially for helping the entrepreneurs and will be a single place for serving the financial requirements of these startups.
The bank has also opened its first Brach in Bengaluru dedicated for the startups. A part from providing financial aid to the startups, the banks will also aid with technology expertise. They are also associated with third parties for imparting knowledge about taxation and legal help.
There are a few limitations of the Prime Minister’s Stand up policy. According to Nasscom Startup Report 2014, India is aided with more than $ 2 billion funds for more than 3,000 startups and the count is estimated to go as high as 11,000 in five years. Moreover, in today’s world the start-ups surely owe their launch to the success of Indian technology and software. Also only by providing financial aid to the start-ups through the bans will be of no help for the growth of the society as the things might fall at wrong places. This initiative will only benefit fresh ideas or startups, and not business that are already running. Also the business owners needs to ensure that they operate in accordance with the guidelines of the scheme and follow the law. Further the scheme also terms that any business idea with an innovative product or services will be encouraged so that a value is created for the customers.\
The main objective of the Startup India is to empower the schedule caste and tribes along with women. These group of people are the most under privileged and suppressed citizens. Hence to give the right position and identity to the talent that they have, it is a great initiative. The Loans of 10 Lakhs to 100 lakhs will be provided to the startups so that there is employment and growth of the economy. The government has sanctioned a huge amount of money nearly of Rs. 10,000 crore for the initial stage of the scheme. The amount of loan to be sanctioned by the government will completely rely on the amount of investment required according to the nature of the business.
Further the scheme also terms that any business idea with an innovative product or services will be encouraged so that a value is created for the customers.
The loans for empowering women start-ups is an objective of the Start Up India. According to a study bout 73% women entrepreneurs failed to get funding for setting up their ventures, hence to aid the women start-ups this scheme is launched along with Dalits and other weaker sections of the country. Every government bank in India will provide loans to at least one Dalit and one woman entrepreneur. With this intention funds can be made easily available for the women who want to set up a business.
Interest rate for Stand Up India Loan
The interest rates given by the banks as a part of the initiative will be less than the average rate of interest charged by the financial institutions. The least applicable rate of interest will be charged to the applicants and this will not create a heavy burden of repayment of heavy dues. The rate of interest will vary according to the amount of the loan varying from Rs. 10 lakh to Rs. 1 crore.
Moreover, the rate of interest charged prior to this initiative was around 35 percent on an average. But now the entrepreneurs do not have to worry about paying heavy interest rates as the government has made it very easy for them to get loans at lower rate of interest.
- The Stand Up India aims to aid and back the Women and SC/ST entrepreneurs. The initiative intends to support 2.5 lakh borrowers.
- There will be relaxation of Income tax for the start –ups for the first three years.
- A small application form needs to be filled for applying and also licensing process will also be automated soon.
- A fast track road map will be set up and a dedicated website and application will be developed.
- Loan amount varying from 10 lakh to Rs. 1 crore will be sanctioned to the startups.
Helpline numbers / Contact numbers
There is presently no dedicated call center support for the Stand Up India. A helpline will be launched soon. The people who have queries or need information can contact the concerned group at 011 40540722.
Is it good for economy?
This initiative is to provide financial aid to the Dalits and women who are deprived from getting enough financial aid for startup new ventures. As a result of this many innovative ideas are not reaped. Hence for the economy to grow and employment to grow, this initiative is very important. Moreover, a new shape of the consumer market can be obtained with the help of this initiative.
Further, with Start Up India there will be more job opportunities created within the country and the total income will increase. Hence jobs can be provided to all those within the country and also the young talent and ideas can be preserved within the nation. They do not have to seek for jobs outside the country.
Who will fund this scheme?
The Indian Government has approved Rs.10, 000 crore initially as a part of the Startup India. The government is making this pool of funds available for the under privileged to encourage innovative ideas. Google has also stood and encouraged this movement by sanctioning huge amount of money for encouraging the most innovative ideas. Google has identified the potential and is encouraging it to grow.
Is PAN Card and Aadhar Card Required
PAN card is better to be produced at the time of Application for the Stand UP India Movement. This gives the authentication of the person and makes it easy for the validation process to be executed. Also Aadhar card need to be produced while applying as it a certificate of your citizenship and other documentation details. It makes it easier for the government to process application with these proofs.
There is also an online survey named as Yourstory that is done to understand the need and problems faced by the startups.
Following is the result of the study:
|S.no||Proposed Requirement||No of votes|
|1||No of people who need funds and financial aid||596|
|2||Access to resources||462|
|3||People who voted for easier regulatory compliance norms||700|
|4||People who need relaxation in the existing tax norms||850|
Few more things of the program
- There are nine start up ideas from India that have been aided with more than billion dollars for setting up their venture.
- There are few famous names like Masayoshi Son, CEO, and Nikesh Arora, President and COO, SoftBank, Travis Kalanick, Founder, Uber, and Adam Nuemann, CEO, WeWork. Flipkart founder Sachin Bansal, Snapdeal’s Kunal Bahl, Ola founder Bhavish Aggarwal, Paytm founder Vijay Shekhar Sharma, ShopClues founder Radhika Agarwal, and Oyo Rooms’ Ritesh Agarwal.
- 80% of the amount of the rebate will be refunded after the entrepreneurs fill up a patent application form.
- The Exit process is very fast. It only takes 90 days to wind up the entire process.
- More than 5 lakh schools will be covered under the program to promote innovation core programs.
- Startup events both national and international will also be held to pool funds.
- The prime focus of the Start Up India is to encourage young minds to come up with innovative ideas and new job opportunities are created within the country.
- This initiative will also increase the competitive level of India as a country in the Global economy. This will help the economy grow and flourish.
Below is a table that highlights the key features of Stand Up India Loan Yojana:
|1||Start Up is an initiative of the Department of Financial Services (DFS) to encourage SC/ST and women entrepreneurs||Government will sanction loans to them for starting up their business.|
|2||Every bank branch to lease out minimum two projects for each category of applicants.||Grant loans to at least one Dalit and one woman entrepreneur.|
|3||The government of India is funding this movement and Indian Government has approved Rs.10, 000 crore initially as a part of the Startup India.||The target is attain minimum 2.5 lakhs approvals in a time frame of 36 months.|
|4||Supporting the borrowers during the initial and post initial stages of startup.||Loan amount varying from Rs. 10 lakh to Rs. 1 crore will be sanctioned to the startups|