Uttar Pradesh chief minister Yogi Adityanath, on May 20 (Wednesday), issued the first tranche of INR 15 Cr to Small Industries Development Bank of India (SIDBI) for the INR 1,000 Cr Startup fund.
The fund was established under the UP IT and Startup Policy of 2017 with an initial corpus of INR 1K Cr to encourage startup schemes across the state. It will be managed by SIDBI.
The move by the UP government is aimed at boosting UP’s startup ecosystem and generating employment for those who are returning home after losing their jobs due to Covid-19 pandemic.
Adityanath also highlighted that it was important to bring a new startup policy for agriculture, health, education and several other important sectors of the state and ensure that the youth is connected with it. He added that the step will prove to be an important booster for the state and allow its economy to revive faster.
“UP Startup Fund is the very first state fund to be operationalised. We believe this step will give a fillip to the deserving startups in the state,” Mohammad Mustafa, SIDBI chairman and managing director, said in a press release.
The startup fund will act as a fund of funds through which the capital will not be directly invested in the company. Instead it will participate in the Securities and Exchange Board of India (SEBI) approved alternative investment funds.
SIDBI has been carrying out fund of funds operations since 1995 and operates India Aspiration Fund (IAF) and A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) Fund.
As per media reports published in February 2020, the Uttar Pradesh government was also looking to issue a new “Startup Policy 2020” to enter into the top three domestic ranking by next year. Under the new policy, the state government will appoint a nodal officer in all the 75 districts to promote startups. Besides this, the officials will also be incharge of forming alliances with the educational and technical institutions to promote new business ventures.
Reviewing the draft, Adityanath had also emphasised that the state possessed large untapped potential in the startup segment. He had also directed officials to create a mechanism of coordination between the different wings of the state government and higher educational institutions, agricultural universities.