In A Startup-Friendly Budget, UP Govt Keeps INR 100 Cr For Seed Funding, INR 20 Cr For Agritechs

In its endeavour to give a boost to the startup ecosystem in the state, the Uttar Pradesh government on Wednesday (February 22) announced a slew of sops in its Budget 2023-24. 

For starters, the state government has earmarked INR 100 Cr to provide seed funding for selected startups offered through incubators. The Budget has also made a provision of INR 20 Cr to establish the upcoming Agriculture Accelerator Fund to promote and encourage agritech startups in the rural areas of the state.

Besides, the state authorities have also set aside an additional INR 60 Cr to develop the proposed Uttar Pradesh Information Technology and Startups Policy. 

The announcements have largely been taken to encourage entrepreneurs in the state and to scale the local ecosystem, which is yet to take off. Uttar Pradesh is currently home to 50 incubators and 7,200 startups that operate across the length and breadth of the state.

“Special steps have been taken in the budget with the goal of fostering the self-reliance of youth and promoting startup culture,” the state government said in a statement. 

Under the state’s ambitious UP Startup Policy, 2020, local authorities claim to be promoting startups across domains such as agriculture, healthcare, energy, khadi, education, tourism, and transportation.

Tapping Into The Local Startup Ecosystem

The sops have come nearly three months after the Uttar Pradesh government revamped its entire startup policy and announced a wide variety of incentives and financial aid to scale the burgeoning startup ecosystem in the state. 

The sops include an increased seed funding for startups by nearly 50% to INR 7 Lakhs, along with a hiked monthly sustenance allowance for startups from INR 15,000 to INR 17,500. 

The state government has also been looking to set up five additional startup-focused centres of excellence (CoE) and deploy the recently unveiled INR 4,000 Cr ‘UP Innovation Fund’ to pump money into early-stage startups. 

In addition, the Uttar Pradesh government has also been looking to establish an INR 1,000 Cr angel fund to back about 10,000 startups in the state. 

With this, Uttar Pradesh has joined the growing list of states that have announced a slew of offerings for startups in this year’s Budget. Earlier this week, the Karnataka government proposed to set up an INR 30 Cr park in Bengaluru and nine new industrial clusters across the state. 

Rajasthan has also earmarked INR 250 Cr for Rajasthan Venture Capital Fund to support early-stage startups. Besides, the state also announced an exemption on stamp duty for loans taken for building startups.