ASPIRE Scheme

The ASPIRE Scheme, means ‘A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship’, is a leading initiative by the Ministry of Micro, Small and Medium Enterprises (MSME), Government of India. Introduced in 2014, the scheme is designed to promote entrepreneurship, innovation, and skill development in rural and agro-based sectors. It focuses on building a sustainable environment that supports startups and small enterprises by offering financial aid, incubation facilities, training programs, and mentoring support.

Rural India has vast potential for entrepreneurship and innovation, especially in agriculture and allied industries. However, challenges such as access to finance, infrastructure, and opportunities for skills development hamper the growth of rural entrepreneurs. The ASPIRE scheme seeks to fill this gap and enable rural youth so that they can turn innovative ideas into viable businesses, which will contribute to job creation and rural economic development.

Objectives of the ASPIRE Scheme

The ASPIRE scheme is designed to promote rural entrepreneurship and enhance growth in agro-based industries by overcoming unique challenges faced by rural innovators. Its goals focus on creating a robust ecosystem that supports startups, innovation and economic growth in rural India.

• Promote Rural Entrepreneurship: To provide helpful environment for rural youth and entrepreneurs to start and grow businesses in agro-based sectors.
• Encourage Innovation: Assist in the development of advanced technologies and solutions suitable for rural requirements and industries.
• Job Creation: To provide employment opportunities in rural areas by promoting micro, small and medium enterprises.
• Skill Development: Enhancing entrepreneurial and technical skills of rural youth through training and mentoring programmes.
• Financial Support: Offer funding and investment support to rural startups and incubators.
• Strengthen Rural Economy: Advance rural industrial development and minimize regional disparities through focused interventions.

The ASPIRE scheme works through specific components intended to build a supportive ecosystem for rural industrialists. These components ensure access to funding, infrastructure, mentorship, and innovative assistance across the rural startup landscape.

1. Livelihood Business Incubators (LBIs): The focus of the ASPIRE scheme lies in the establishment of Livelihood Business Incubators across rural India. These LBIs work as a hub for business development, providing the following cooperation:

• Skill Development: Training programs customized to local resources and industries, including agriculture, food processing, handicrafts, and allied sectors.
• Mentorship: Experienced mentors guide startups through product development, marketing strategies, and business management.
• Infrastructure: Access to modern tools, equipment, and workspace for prototype improvement and testing.
• Market Linkages: Helping rural entrepreneurs unite with buyers, suppliers, and investors to nurture their businesses.

2. Fund of Funds for Rural Startups: Identifying the funding challenges faced by rural startups, the ASPIRE Scheme includes a Fund of Funds (FoF) model to divert investment into alternative investment funds (AIFs) that back early-stage startups. This approach removes a significant gap of seed and early-stage financing for rural entrepreneurs, permitting innovative startups to access the capital required to grow and scale their operations.

3. Support to Technology Business Incubators (TBIs): Earlier, ASPIRE has also supported Technology Business Incubators focusing on tech innovations related to rural industries. While support for new TBIs will cease after March 2021, previously funded TBIs will continue to assist rural tech startups in product development and market access.

The ASPIRE Scheme provides multiple benefits to rural entrepreneurs, startups, and the rural economy as a whole:

• Financial Assistance: The scheme provides grants and funding support to Livelihood Business Incubators (LBIs) and startups, helping to streamline financial challenges during the crucial early stages of enterprise development and growth.
• Capacity Building: ASPIRE delivers targeted training and skill development programs that promote both the technical knowledge and entrepreneurial abilities of rural youth, preparing them to successfully manage their ventures.
• Incubation Support: Entrepreneurs gain access to advanced incubation facilities, which mitigate the requirement for costly infrastructure investment and offer critical mentoring, networking, and business support services.
• Innovation Encouragement: The scheme promotes the creation and application of innovative technologies designed specially to address the unique challenges faced by rural businesses and agricultural processes.
• Market Access: ASPIRE helps rural producers and startups connect with larger national and international markets, improving sales potential and enhancing overall profitability through better marketing and distribution.
• Social Empowerment: The scheme prioritizes women entrepreneurs and marginalized groups, encouraging inclusive development and ensuring that economic opportunities reach the most underprivileged sections of rural society.

The ASPIRE scheme targets both individual entrepreneurs and organizations aiming to promote rural entrepreneurship and agro-based industries. Eligibility requirements ensure that participants are committed to encouraging sustainable rural economic development.

For Entrepreneurs and Startups

• Must be individuals, groups, or companies involved in or aiming to engage in rural or agro-based business activities.
• Preference is given to rural youth, women entrepreneurs, and startups focusing on agriculture, food processing, or allied sectors.
• Entrepreneurs must be willing to adhere with scheme rules, including registration and reporting requirements.

For Organizations Seeking to Become LBIs

• Should have experience and capacity in entrepreneurship development, skill training, and incubation.
• Must submit a detailed project proposal highlighting their plan to foster rural innovation and business incubation.
• Approved LBIs receive funding and technical support from the MSME Ministry.

The ASPIRE Scheme provides substantial financial assistance to foster rural entrepreneurship and innovation. The following is a detailed breakdown of the funding provisions under the ASPIRE Scheme, aimed at supporting rural entrepreneurship and innovation:

1. Livelihood Business Incubators (LBIs): Eligible government entities can receive a one-time grant covering 100% of the cost of plant and machinery (excluding land and infrastructure), up to a maximum of ₹1 crore. Moreover, they can acquire operational expenditure support up to ₹1 crore for activities such as manpower costs, running incubation programs, and skill development initiatives.

• Private Agencies: Private institutions are authorized to a one-time grant covering 50% of the cost of plant and machinery (excluding land and infrastructure), capped at ₹75 lakh. They can also access operational expenditure support up to ₹1 crore for similar activities as mentioned above.

2. Technology Business Incubators (TBIs)

• Existing TBIs: For existing incubators, a one-time grant of 50% of the cost of plant and machinery (excluding land and infrastructure), up to ₹30 lakh, is given.
• New TBIs: For setting up new TBIs, a one-time grant of 50% of the cost of plant and machinery (excluding land and infrastructure), up to ₹100 lakh, is available.

3. Seed Capital for Startups: A one-time grant of ₹1 crore is provided to eligible incubators as seed capital. These incubators can then invest up to ₹20 lakh per startup, either as debt or equity, to support innovative and successful ideas.

4. Fund of Funds for Startups: ‘ASPIRE Fund’ managed by SIDBI, the ASPIRE Fund has a corpus of ₹310 crore. This fund supports several Alternative Investment Funds (AIFs), which in turn invest twice the amount of SIDBI’s contribution in MSME/startup businesses, including those in the rural and agro sectors.

5. Accelerator Support Programs: A grant of ₹2 crore is assigned for conducting 10 workshops focused at assisting incubates in generating successful business enterprises. These workshops are designed to offer mentorship, networking, and business development support.

Applying to the ASPIRE Scheme includes a few steps for both rural entrepreneurs and organizations seeking to become Livelihood Business Incubators (LBIs).

For Rural Entrepreneurs and Startups

• Identify an LBI: Entrepreneurs must connect with an existing Livelihood Business Incubator in their region or apply directly to the MSME Ministry if no local LBI is available.
• Prepare Documentation: Include a comprehensive business plan, identity and address proofs, educational qualifications, and other relevant documents.
• Submit Application: Applications can be submitted online or offline as directed by the MSME Ministry or designated agencies.
• Verification & Approval: The authorities review the application, may conduct interviews or assessments, and approve eligible startups.
• Access Support: Approved entrepreneurs receive financial assistance, training, mentoring, and incubation support.

For Organizations Applying to Become LBIs

• Proposal Submission: Interested organizations should submit a comprehensive proposal describing their capability, infrastructure, and plans to encourage rural entrepreneurship.
• Evaluation: The Ministry assesses proposals on the basis of merit, capacity, and impact potential.
• Approval & Funding: Selected organizations receive grants and begin operations as official LBIs under ASPIRE.

To ensure active implementation, the ASPIRE Scheme has a strong monitoring system:

• LBIs and startups are required to submit regular progress reports and financial statements.
• The MSME Ministry conducts field examinations and audits to validate compliance.
• Non-compliance may result in suspension of aids or funding withdrawal.
• Success stories and best practices are documented and promoted to inspire wider adoption.

Impact and Success Stories

Since its launch, the ASPIRE Scheme has made substantial contributions to rural entrepreneurship:

• Multiple LBIs Established: Hundreds of Livelihood Business Incubators have been set up across India, supporting thousands of rural entrepreneurs.
• Startups Supported: Several agro-based startups have received incubation, mentoring, and funding support to commercialize their innovations.
• Job Creation: Thousands of jobs have been generated in rural areas through the development of micro and small enterprises.
• Women Empowerment: The scheme has actively promoted women-led enterprises, boosting gender inclusivity.
• Innovative Solutions: Rural challenges like food processing, organic farming, and sustainable packaging have seen innovative startups develop under ASPIRE.

These achievements determine the scheme’s success in renovating rural innovation into economic growth.

Corpseed is a leading consulting firm specializing in guiding rural entrepreneurs and startups through government schemes like ASPIRE. We offer comprehensive support to help innovators unlock funding, incubation, and skill development opportunities under the scheme.

• Expert Guidance: Our skilled consultants provide detailed insights into ASPIRE’s eligibility criteria, documentation, and procedural requirements to ensure a smooth application process.
• End-to-End Application Support: From preparing applications to submission and follow-up, we manage every step, reducing errors and accelerating approvals for clients.
• Compliance and Legal Assistance: We help startups and incubators adhere to all regulatory and compliance norms under ASPIRE, protecting them from legal or procedural issues.
• Proactive Monitoring: We stay in continuous contact with sauthorities to track application progress and facilitate timely fund disbursal, letting entrepreneurs focus on business growth.
• Tailored Solutions: Understanding the unique challenges of rural enterprises, we customize our services to maximize benefits from the ASPIRE Scheme for every client.