The Modi-led BJP government is now a fast pace to deliver policies that will help make India one of the world’s top three startup hubs. The finance minister Arun Jaitley is likely to announce a slew of measures for startups ecosystem in his much-anticipated budget on February 28. According to the media reports, the government plans to allocate INR 2,000 Cr. as a fund of funds for seed investments in very new startups.
Besides, it also plans to increase early-stage funding for intellectual property-centric companies in multiple industries including IT and biotech in a way that the entrepreneur does not have to deal with the government directly.
If reports are to be believed, the government is likely to follow footsteps of Israel and China, where the government is an active supporter of the country’s startups with money and friendly policies.
Speaking on the plans, Arvind Gupta, the head of the Bharatiya Janata Party’s IT division said, “A startup fund-of-funds will be most helpful in creating a robust seed funding ecosystem and fueling the much-needed innovation ecosystem. We hope for a significant allocation for software products startups as this sector will have one of the biggest transformational impacts on India’s economy over the next 10-15 years.”
Today, at least two startups are being created every day. Earlier in last year, venture capital funds invested $2 Bn in early-stage companies, and this year is expected to dominate all previous years in terms of the volume and size of venture investments.
The government also plans to fund ‘innovation labs‘ to increase the growth of startups across, similar to the large incubators set up at Harvard and Stanford universities. Also, the government will work with software companies to a create technology platform for small businesses like kirana stores to go digital.