Madhya Pradesh's strategic push for startups

Bhopal: Madhya Pradesh is offering financial assistance as well as a comprehensive framework to foster a robust startup ecosystem that could incubate innovations and create employment.

The state government introduced the 'MP Startup Policy and Implementation Scheme 2022' that offers startups a financial support of up to 18 per cent of their total funding or investment, subject to a cap of Rs 18 lakh, according to the policy document.

This assistance is provided separately for each investment stage, with a maximum of four stages during the startup's lifecycle.

The policy outlines a comprehensive framework for the establishment and growth of startups, including financial incentives, infrastructure support, and capacity-building initiatives.

Madhya Pradesh, often referred to as the heart of India, is brimming with natural resources and boasts over 300 industrial parks. With a population exceeding 8 crore, the state is home to a thriving talent pool, with fresh graduates emerging annually from more than 1,287 industrial training institutes, 1,373 government and private colleges, and several top-tier universities, including IIT and IIM in Indore.

The state's commitment to fostering entrepreneurship is evident in its strategic policies, which have led to the establishment of over 4,900 recognised startups. With industrial parks dedicated to various sectors such as IT, semiconductors, textiles, automotive, and solar, Madhya Pradesh offers an ideal environment for new businesses to thrive.

During a recent visit to Japan, Chief Minister Mohan Yadav reiterated the state's dedication to supporting investors, emphasising stable policy frameworks to back their investments. Currently, the state has a land bank of over 1 lakh acres available for industrial development.

In its pursuit of innovation, entrepreneurship, and job creation, the Madhya Pradesh government has introduced a new policy that supports startups with capital assistance. The state is also actively promoting the spirit of entrepreneurship among school and college students.

Madhya Pradesh aims to achieve 100 per cent growth in startup registrations under the Startup India initiative, as well as a 200 per cent growth in startups within the agriculture and food sectors. The state currently houses 72 incubators and has set a target to increase the number of product-based startups.

The state government is making special efforts to inculcate the spirit of innovation and startup among the students enrolled in schools and colleges.

Madhya Pradesh at present has 72 state-wide incubators.

To make it easier for startups to grow, the state has relaxed eligibility norms for experience and turnover requirements and has exempted startups from Earnest Money Deposits (EMD) in government tenders. Additionally, the state offers incentives at every stage of a startup's growth, including event rentals.

The Madhya Pradesh startup policy offers financial assistance of up to 15 per cent (capped at Rs 15 lakh) of the first investment received by a startup from SEBI- or RBI-recognised financial institutions. For women, Scheduled Castes, and Scheduled Tribes entrepreneurs, the policy offers 18 per cent funding, capped at Rs 18 lakh.

For incubators, the policy provides Rs 5 lakh per event for startup-related events, up to Rs 20 lakh annually. It also includes a one-time Rs 5 lakh grant for upgrading incubators to increase seating capacity by 20 per cent.

To ease the financial burden on startups, the state offers to cover 50 per cent of monthly lease rentals (capped at Rs 5,000) for three years. Furthermore, up to Rs 5 lakh in assistance is provided for securing patents, and the state reimburses up to 75 per cent of expenses incurred by startups attending domestic and international events, capped at Rs 50,000 and Rs 1.5 lakh, respectively, according to the document.

Besides the financial assistance, the state government in the policy has promised to exempt or reimburse the selected startup from all necessary license or consent charges as well as provide procurement assistance in the state for two years.

The policy support comes on top of the advantage of abundant resources the state has which include electricity, water, and forest. The state is also a major exporter of wheat, metals, and medicines to over 160 countries. Its robust industrial growth and export activity reflect the state's immense potential for nurturing new investments.

Well-connected to major industrial corridors, Madhya Pradesh facilitates the efficient, low-cost transportation of goods across the country, offering a strategic advantage to businesses looking to expand.