Start Your Own Business: Udyam, MUDRA

Overview

Start Your Own Business

The honest roadmap

What you need to know

1
You can start small: a shop, food stall, tailoring, repair, tuition, a craft, or a tech startup. Test the idea with little money before borrowing.
2
Registration on Udyam is free, online and needs only Aadhaar. It opens the door to MSME loans and schemes.
3
Government help includes MUDRA loans without collateral (up to ₹20 lakh), the PMEGP subsidy for new units, Startup India, and schemes for artisans, street vendors and women's groups.
4
Many small businesses struggle at first. Keep accounts, borrow carefully, and never pay a "processing fee" to anyone promising a government loan.

Official sources

Inside this branch

Rules change every year: check the official website before you apply.
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01Branch

Before you start

Test the idea

Learn from these 2

Official
Udyami Mitra (SIDBI)Loan applications with handholding support.
Free
Official
MSME CHAMPIONSHelp and complaints for small businesses.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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01Before you start

First steps

What you need to know

1
Learn the work first (a job, apprenticeship or ITI course helps). Talk to customers, start with orders from people you know, and track every rupee in a notebook or app.
2
Start with your own small savings or a small loan. Grow only when sales are steady.

Official sources

Rules change every year: check the official website before you apply.
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01Before you start

Which business form?

18You must be

What you need to know

1
Most small businesses start as a sole proprietorship (just you; no separate registration, your PAN, Udyam and bank account are its identity). Others: partnership, LLP, One Person Company or private limited company.
2
You must be 18 to sign contracts or become a company director. Ask a chartered accountant before choosing a company form (reported costs and rules vary).

Rules change every year: check the official website before you apply.
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02Branch

Udyam registration

Free MSME identity

Learn from these 3

Official
Udyam registrationFree, Aadhaar-based; MSME limits; fake-site warning.
Free
Official
Udyam Assist PlatformAssisted registration for informal micro units.
Free
Official
SIDBI: Udyam AssistHow assisted registration works.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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02Udyam registration

How it works

What you need to know

1
Totally free, online, no documents to upload: start with your Aadhaar number; PAN and GST data are pulled in automatically.
2
Micro means investment up to ₹2.5 crore and turnover up to ₹10 crore (limits from April 2025). Very small informal units can register with help on the Udyam Assist Platform.
3
Beware of fake Udyam websites that charge fees. Only udyamregistration.gov.in is official.

Official sources

Rules change every year: check the official website before you apply.
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03Branch

Loans: MUDRA

Up to ₹20 lakh without collateral

Learn from these 3

Official
PIB: MUDRA up to ₹20 lakh (PDF)Shishu, Kishore, Tarun and Tarun Plus.
Free
Official
MUDRAScheme details.
Free
Official
JanSamarthApply for government loan schemes online.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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03Loans: MUDRA

The four levels

What you need to know

1
Shishu up to ₹50,000; Kishore up to ₹5 lakh; Tarun up to ₹10 lakh; Tarun Plus ₹10–20 lakh, only for those who took and repaid a Tarun loan. No collateral.
2
Apply at a bank, small finance bank, NBFC or microfinance branch, or online on JanSamarth or Udyami Mitra. MUDRA does not lend directly and has no agents.

Official sources

Rules change every year: check the official website before you apply.
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03Loans: MUDRA

Be careful

What you need to know

1
A loan is not free money: unpaid loans damage your credit score and future borrowing. Borrow only what the business can repay.

Rules change every year: check the official website before you apply.
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04Branch

Loans with subsidy: PMEGP

For new units

Learn from these 3

Official
PMEGP e-portalApply and check the current status.
Free
Official
Rajya Sabha answer on PMEGP (PDF)Project limits and subsidy rates.
Free
Official
Stand-Up MitraOld scheme closed March 2025; check for the revamped one.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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04Loans with subsidy: PMEGP

How it works

15–35%government pays

What you need to know

1
For new units: projects up to ₹50 lakh (manufacturing) or ₹20 lakh (service). The government pays 15–35% as subsidy, more in villages and for SC, ST, OBC, minority, women, ex-servicemen, PwD and North-East applicants. You put in 5–10%.
2
Age 18+; Class 8 pass for bigger projects. Short entrepreneurship training is usually required (reported). Check the scheme's current status and apply on the KVIC portal.

Official sources

Rules change every year: check the official website before you apply.
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04Loans with subsidy: PMEGP

Stand-Up India

What you need to know

1
Stand-Up India (₹10 lakh to ₹1 crore for SC, ST and women's first businesses) closed in March 2025; a revamped scheme has been announced. Ask your bank for the current version.

Official sources

standupmitra.inStand-Up India (old scheme closed; revamp announced)↗

Rules change every year: check the official website before you apply.
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05Branch

Startups

For new ideas and technology

Learn from these 4

Official
Startup India recognitionFree; who qualifies.
Free
Official
Startup India Seed FundApply through approved incubators.
Free
Official
Atal Innovation MissionTinkering labs and incubators.
Free
Official
MoE Innovation CellInnovation councils in colleges.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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05Startups

Startup India

What you need to know

1
A company, LLP, partnership or cooperative under 10 years old, with turnover under ₹200 crore, working on something new or improved, can get free DPIIT recognition. A normal shop is not a "startup".
2
Recognised startups can apply through incubators for the Seed Fund (grants up to ₹20 lakh for a prototype; more as loans or debentures). Some can get a tax holiday with separate approval.

Official sources

Rules change every year: check the official website before you apply.
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05Startups

In school and college

What you need to know

1
Atal Tinkering Labs in schools, innovation councils and incubators in colleges help students build and test ideas.

Official sources

Rules change every year: check the official website before you apply.
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06Branch

Artisans, vendors and groups

Smaller schemes

Learn from these 4

Official
PIB: PM Vishwakarma (PDF)Trades covered, training, toolkit, loans.
Free
Official
PM Vishwakarma portalRegister through a Common Service Centre.
Free
Official
PM SVANidhiLoans for street vendors.
Free
Official
PIB: self-help groups (PDF)SHG bank loans and interest help.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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06Artisans, vendors and groups

What exists

What you need to know

1
PM Vishwakarma: for traditional trades like carpenter, tailor, potter, cobbler and barber: free registration at a Common Service Centre, training, a ₹15,000 toolkit incentive and loans of ₹1 lakh then ₹2 lakh at 5%.
2
PM SVANidhi: small working-capital loans for street vendors, rising step by step as you repay (reported: ₹15,000, then ₹25,000, then ₹50,000).
3
Women's self-help groups (DAY-NRLM) get collateral-free bank loans and interest help.

Official sources

Rules change every year: check the official website before you apply.
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07Branch

Rules to follow

GST, FSSAI, tax

Learn from these 3

Official
GST portalRegistration and returns.
Free
Official
FSSAI turnover order (PDF)Basic registration up to ₹1.5 crore.
Free
Official
FoSCoSApply for FSSAI registration.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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07Rules to follow

The basics

₹1.5 crorecovers turnover up

What you need to know

1
GST registration is usually needed above ₹40 lakh turnover for goods or ₹20 lakh for services (lower in some states; online sellers and inter-state sellers often must register earlier). Check with a CA.
2
Food business: FSSAI basic registration covers turnover up to ₹1.5 crore (from April 2026); bigger ones need a licence.
3
Open a current account, keep bills, and file income tax. Small businesses can often use a simple presumptive tax scheme. Shops may need a state shop and establishment registration.

Official sources

Rules change every year: check the official website before you apply.
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08Branch

Free training and help

Learn before you borrow

Learn from these 2

Official
DC-MSME: credit guaranteeHow collateral-free MSME loans are guaranteed.
Free
Official
Udyami MitraHandholding agencies and loan applications.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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08Free training and help

Where to go

What you need to know

1
Your District Industries Centre, MSME development offices (awareness and skill programmes), RSETIs run by banks in many districts, and online help on Udyami Mitra and CHAMPIONS (reported).

Official sources

Rules change every year: check the official website before you apply.
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09Branch

For girls and women

Support

Learn from these 2

Official
Women Entrepreneurship PlatformSchemes, mentors and networks for women.
Free
Official
myScheme: Udyogini (Karnataka)Example of a state scheme for women.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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09For girls and women

What exists

What you need to know

1
About two-thirds of MUDRA loan accounts belong to women (reported). PMEGP gives women a higher subsidy. Women's self-help groups get bank loans, and NITI Aayog's Women Entrepreneurship Platform connects women to schemes and mentors.

Official sources

Rules change every year: check the official website before you apply.
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10Branch

The honest picture

Before you borrow

Learn from these 1

Official
JanSamarthCompare schemes before borrowing.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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10The honest picture

What to know

What you need to know

1
Thousands of small units close every year, and about one in ten MUDRA loans is not being repaid (reported). Start small, keep a buffer, and do not take a big loan for an untested idea.

Rules change every year: check the official website before you apply.
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11Branch

Avoid scams

Fake loans and schemes

Learn from these 5

Official
All India Radio: fake MUDRA letterPIB Fact Check on 'processing fee' fraud.
Free
Official
RBI: digital lending directionsRules for loan apps and the public app list.
Free
Official
RBI SachetCheck or report illegal deposit schemes.
Free
Official
Banning of Unregulated Deposit Schemes Act (PDF)Ponzi-type schemes are illegal.
Free
Official
Cyber crime portal (helpline 1930)Report fraud.
Free

Inside this branch

Rules change every year: check the official website before you apply.
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11Avoid scams

Red flags

1930Lost money? Call

What you need to know

1
"Pay a processing fee and get a MUDRA or PM loan": PIB Fact Check has flagged many such fake letters. Government loans come only from banks and lenders, with no fee to agents.
2
Loan apps that are not linked to an RBI-regulated lender, charge huge fees or harass you: check RBI's list.
3
MLM and "double your money" schemes: pyramid schemes are banned under the direct selling rules, and unregulated deposit schemes are illegal. Lost money? Call 1930.

Official sources

Rules change every year: check the official website before you apply.
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Start Your Own Business

₹Rough cost