Tag Archives: Micro, Small & Medium Business. Small & Medium Business Organisations. MSME & SSI.

Govt. Launches India Aspiration Fund & Make in India Loans for Indian Startups, SMEs; Allocates Rs.12000 Cr – Reshared Year 2015

PM Modi thundered “Start-up India, Stand up India” during his Independence Day speech in Delhi, in order to inspire more Indians into entrepreneurship. The best part is that, the talks are transforming into concrete action.

In a new push for assisting startups and SMEs, Govt. has launched two new investment and loan programs with a combined budget allocation of Rs 12,000 crore.

Minister of State for Finance Jayant Sinha said while announcing these programs, “India is expected to surpass the UK in terms of number of startups launched and would be behind only to the US. There is need for more funds that focus on startups and growth stage MSMEs,”

Both of these programs will be supported and managed by Small Industries Development Bank of India (SIDBI).

India Aspiration Fund

Finance Ministry launched a unique investment program, described as ‘fund of funds’, which will invest in various VC funds for meeting the equity requirement of MSME start-ups. Hence, instead of directly funding in startups, India Aspiration Fund (IAF) will help the VCs to come up with newer investment ideas and protocols.

Besides infusing crores of funding into SMEs, this will also create lakh of new jobs.

In a statement, SIDBI described the objective of IAF to “catalyze tens of thousands of crores of equity investment into start-ups and MSMEs (micro and small enterprises), creating employment for lakhs of persons, mostly educated youth, over the next four to five years,”

Life Insurance Corporation of India (LIC) will be a co-investor in IAF.

This new announcement of IAF is being linked with the news we reported in February, wherein RBI had announced a corpus of Rs 2000 crore for Indian startups.

As per SIDBI chairman and managing director Kshatrapati Shivaji, Rs.753 crore out of Rs. 2,000 crore has already been committed under IAF to various VCs, which include: IvyCap Ventures (Rs 60 crore), Blume Ventures (upto Rs 30 crore) and Carpediem Capital Partners (Rs 20 crore).

Govt. has roped in veterans of entrepreneurship world to manage IAF: Harkesh Mittal, Secretary, Technology Development Board, Manipal Global Education Chairman TV Mohandas Pai, Info Edge founder Sanjeev Bhikchandani, former Nasscom chairman Kiran Karnik and Indian Angel Network cofounder Saurabh Srivastava are some of the members who will devise strategies to optimally utilize this fund.

SIDBI Make in India Loan for Small Enterprises (SMILE)

In association with SIDBI, Govt. has launched another innovative loan program for SMEs, named as SIDBI Make in India Loan for Small Enterprises (SMILE). A budget of Rs 10,000 crore has been earmarked for SMILE.

Focused on the 25 sectors under PM Modi’s Make in India vision, SMILE will offer quasi-equity and term based short term loans to Indian SMEs which will have less stringent rules and regulations.

Together, these two Govt. initiated programs will help to create more than 20 lakh direct and indirect jobs in the country.

Another Govt. scheme called Micro Units Development and Refinance Agency (MUDRA Bank) is already under process, wherein Rs 20,000 crore has been earmarked for developing startups in India.

VidyaSunil & Associates is into practice of Tax Complaince, Audit, Accounts , Corporate / Business Finance & Outsourced CFO Services.

Advise for contacting VidyaSunil & Associates;

E Mail ID : vidyasunilassociates@gmail.com

Cell No. : +91 9739834819


India Aspiration Fund to boost prospects of MSME start-ups

CRISIL has analysed 1,050 start-up micro, small, and medium enterprises (MSMEs) that were rated on the basis of their 2013-14 (financial year April 1 to March 31) financials. For arriving at start-ups, CRISIL has considered MSMEs that started business operations after 2010. The MSMEs featured in the sample are primarily non-e-commerce enterprises that are in the manufacturing and services space.

The analysis reveals that seven sectors – engineering; construction; agri products; textile; printing & packaging; transport & logistics; and outsourcing & support services – account for 68 per cent of these, and 41 per cent are operational in the engineering, construction, and agri products sectors. Several of these sectors form part of the government’s 25 sectors under the ‘Make in India’ programme.

Additionally, the Government of India has recently announced a Rs 10,000-crore India Aspiration Fund to provide equity capital for MSMEs-based start-ups. The average net worth of the CRISIL-rated MSME start-ups in the sample was Rs 35 lakh as on March 31, 2014. CRISIL believes that the new fund provides start-ups with the opportunity to raise capital and to grow, and thus contribute to strengthening the economy.

Finance minister Arun Jaitley has announced the launch of India Aspiration Fund with an initial corpus of $305 Mn set under SIDBI.

The India Aspiration Fund to be set up as “fund of funds” is intended to “catalyse tens of thousands of crores of equity investment into startups and MSMEs (micro and small enterprises), creating employment for lakhs of persons, mostly educated youth, over the next four to five years,” Sidbi said.

The fund will be investing in venture capital funds for meeting the equity requirement of MSME startups.

The India Aspiration Fund will have an initial corpus of $305 Mn. “As and when required, more money can be infused,” Jayant Sinha said.

$115 Mn (INR 753 Cr.) of the total $305 Mn (INR 2,000 Cr.) seed capital has already been sanctioned for the equity fund and disbursements have started. According to SIDBI chairman and managing director Kshatrapati Shivaji, the total, $305 Mn of seed capital can be leveraged to raise $3.8 Bn (INR 25,000 Cr.)

The IAF will be managed by an investment committee which includes Harkesh Mittal, Secretary, Technology Development Board, Manipal Global Education Chairman TV Mohandas Pai, Info Edge founder Sanjeev Bhikchandani, former Nasscom chairman Kiran Karnik and Indian Angel Network cofounder Saurabh Srivastava.

“Any move by the government to assist startups is welcome. However, government announcements are usually met with skepticism, and rightly so. But I am quite encouraged to see the way “The India Aspiration Fund” is structured. Since this is going to be a fund of funds administered by SIDBI, the final money will be routed through professional funds and not some government departments. That should fuel the startup ecosystem. Two thumbs up,” said Ajeet Khurana.

Government Help for MSME Development

Universally, the Micro Small and Medium Enterprises (MSMEs) are considered as important growth drivers for the economy and industrial development of the country. The key benefit of this sector is in its employment potential at extremely affordable cost. MSMEs account for more than 80% of overall enterprises in worldwide economies and contribute major part of industrial production as well as export in several countries.


In India, MSMEs play an important role in industrial development of the country. Labour intensity of MSME sector in India is considerably higher than other big sectors. In recent times, the Indian MSME sector has registered significant growth as compared to other industrial sectors. With its dynamism and agility, the sector has demonstrated commendable adaptability and innovativeness to cope up with the recent economic slowdown.


According to the recent statistics, Indian MSME sector employs more than 55 million people in over 25 million enterprises. It is projected that, the sector accounts for more than 40% of the overall manufacturing output and about 35% of the entire export of the country.


Assistance from Government of India for MSME Development

  • Enterprise & Skill Development – The office of MSME organizes several entrepreneurship development and vocational programmes coupled with some specific skills related to industries like food processing, electrical and electronics which help foreign investors to start their own business in India. Here is a list of some of these important programmes –
    • Entrepreneurship Development Programmes(EDPs)
    • Entrepreneurial Skill Development Programme (ESDP)
    • Management Development Programmes (MDPs)
    • Industrial Motivation Campaigns (IMCs)
    • Vocational and Educational Training
  • Technology Upgradation – For the proper up-gradation of technology the Indian government offers capital subsidy and some other assistance to support MSMEs. All the important schemes covered under technology up-gradation and productivity enhancement help MSMEs to tackle the tough challenges of globalization and liberalization. Go through the following details to know about the name and objective of these schemes –
    • Credit Link Capital Subsidy Scheme (CLCSS) – The objective of this scheme is to obtain capital subsidy for implementing new technology.
    • National Manufacturing Competitiveness Programme (NMCP) – The key objective of this scheme is to strengthen MSEs via competitiveness.
    • ISO 9000 Reimbursement Scheme – The prime goal of this scheme is to enhance the competitive strength of the small and medium scale sectors.
  • Access to Credit –The Development Commissioner of MSME offers all essential credit support to Medium and small enterprises through several schemes. These schemes are mainly operated under financial institutions such as NSIC and SIDBI. Go through the following details to know more about the name and objectives of these schemes –
    • Credit Guarantee Trust Fund for MSEs (CGT – MSE) – The objective of this scheme is to facilitate collateral free credit facility for MSMEs.
    • Micro Finance Programme – The key goal of this scheme is to offer credit to low income enterprises.
    • Trade Related Entrepreneurship Assistance and Development (TREAD) –It provides all the necessary assistance and guidance to women entrepreneurs to establish MSMEs.
  • MSE- Cluster Development –TheGovernment of India and the Ministry of MSME have adopted a cluster development approach as a prime strategy to improve the competitiveness and productivity of MSMEs in the country. Clustering of units helps credit agencies and banks to offer affordable services to Micro and Small Enterprises. The key objective of this scheme is to improve capacity of MSMEs via formation of consortia, self-help groups and up-gradation of associations.

Marketing Assistance –The Indian government executes various schemes which are designed to offer a competitive edge to the MSME sector at global level. Here is a list of marketing assistance schemes –

    • SSI – MDA
    • Vendor Development Programme for Ancilarisation


The objective of these marketing assistance schemes below –

    • To spread the importance of adopting bar coding system at a large scale.
    • To improve export from micro, small and medium enterprises.
    • To promote Micro, Medium and Small exporter to tap the overseas market.
    • To improve participation of representatives of micro and small manufacturing enterprises under a stall of MSME India at International Trade Exhibitions and Fairs.
  • Legal Framework –In recent times, the MSME sector has emerged as a significant contributor to the Indian economy. Therefore, it has become extremely important to address detail concerns of these enterprises and give them recognition at a global level. The natural mobility of these enterprises has to be facilitated with proper legal framework and necessary policy interventions. Considering these important objectives, the Indian government has come up with an exclusive legal framework for MSEMs under Micro, Small and Medium Enterprises Development Act, 2006. It is one of the important initiatives taken by the Indian government to utilize the potential of SMEs. Several policy initiatives are also executed at state level for strengthening the role of MSMEs at domestic as well as global level.


Some of the important schemes executed by the Ministry of Micro, Small and Medium Enterprises (MSME) are as follow –

  • Performance and Credit Rating Scheme
  • ISEC – Interest Subsidy Eligibility Certification
  • PRODIP – Product Development, Design Intervention and Packaging
  • RGUMY – Rajiv Gandhi UdyamiMitraYojana
  • PMEGP –Prime Minister’s Employment Generation Programme (PMEGP)
  • SFURTI –Scheme of Fund for Regeneration of Traditional Industries (SFURTI)


There are some specially tailored schemes which National Small Industries Corporation has initiated to put MSMEs in an advantageous and competitive position. These schemes mainly include SME Credit Rating, Export Credit Insurance, Bank Credit Facilitation, Bill discounting, technology support and Government Stores Purchase Programme. Apart from these standard schemes, the Indian government has also initiated International Cooperation Schemes for upgradation and technology infusion of Indian MSMEs. The key objective of these schemes is promotion and modernization of export business of these enterprises. Though there are no special reservations offered to women, there are some incentives and concessions provided by Indian government to women entrepreneurs in MSME sector.



Advise for contacting VidyaSunil & Associates :
E Mail ID : vidyasunilassociates@gmail.com
Cell No.  : +91 9739834819





  • To Impart greater vitality and growth impetus to the small, tiny and village enterprises, in terms of output, employment, exports and installing a competitive culture based on heightened techno- managerial awareness.
  • To Popularize entrepreneurship among our youth & to motivate them to adopt it as their carrier then searching for employment.
  • To impart confidence to individuals in managing their ventures.


  • Assistance/Consultancy rendered to existing units
  • Preparation of State Industrial Profiles
  • Preparation/Updation of District Industrial Potential Surveys
  • Conducting Market Surveys
  • Collection of Production Index Statistics
  • Preparation of Project Profiles
  • Organizing industrial awareness cum motivational Campaigns
  • Organizing Entrepreneurship Development Programmes
  • Organizing Management Development Programmes
  • Organizing Skill Development Programmes
  • Promote and encourage Energy Conservation
  • To encourage Pollution Control activities
  • Promote and encourage Quality Control and technology Upgradation
  • Promote and encourage Export Promotion
  • Promote and encourage Vendor Development and Sub contracting
  • Provide Common Facility Workshop/Laboratories
  • Preparation of Directory of Specific Industry
  • Intensive Technical Assistance
  • Co-ordination with DICs & other industrial development institutions & agencies in the state
  • Linkage with State Govt. Functionaries
  • Source : http://kea.kar.nic.in/activities.html