Karnataka Govt Likely To Launch Exclusive Fund To Encourage Startups In Upcoming Budget

Karnataka Govt Likely To Launch Exclusive Fund To Encourage Startups In Upcoming Budget

After the Centre government move to form a INR 1000 Cr fund to promote innovation among tech startups, its time for state government to play a mentor role to encourage them. Moving in line, the Karnataka government is all set to announce an exclusive fund for startups in the upcoming budget to be presented on March 13.

The state government has already started working on an ambitious plan to have at least 10,000 startups by 2023 and set up many new age incubators to promote student startups.

Speaking on the plans, the person familiar with the plans said, “We want to make Bangalore the global hub of innovation and startups. Modi-led government at the Centre has just announced formation of a INR 1,000 Cr fund for the purpose. With Bangalore leading the country in terms of number of startups, the thinking in the state is to set up our own fund of about 50 crore to 100 crore. The Chief Minister is expected to incorporate the suggestion in his budget.”

It is to be noted that CM Siddaramaiah has held a pre-budget meet with officials of IT, BT and Science and Technology departments and responded positively on announcing new incentives to encourage setting up of Electronic and Systems Design Manufacturing units.

Earlier in last year, the state government has also joined hands with IT industry body, Nasscom to launch one of Asia’s largest startup warehouse of 50,000 square feet in Bangalore. Nasscom already operates a startup warehouse in Bangalore, which is of around 9,000 sq ft. Besides, Nasscom has recently launched a 6,000 sq ft startup warehouse in Kolkata with a capacity of 60 seats.

In January 2013, Startup Village and the Kerala government launched an initiative called SVSquare. Under this initiative it selects promising young entrepreneurs from India every year and send them on an all-expense paid trip to the U.S. Startup Village aims to launch 1,000 technology startups over the next 10 years and start the search for the next billion-dollar Indian company.

The Andhra Pradesh Government is also keen on creating IT Investment Region in Visakhapatnam, Anantapur and Tirupati. The State aims to have 5,000 startups by year 2020 and through that create more employment opportunities. A State innovation fund with a corpus of Rs. 100 crore was created to encourage startups.

Earlier, the Government of Andhra Pradesh has also released the country’s first-of-its-kind Innovation and Start-up Policy 2014-2020 that aims at incubating 5,000 startups and 100 incubators with over 1 million sft office space by June 2019.

Tamil Nadu government is also planning to set up incubation facilities with the help of Nasscom for startups to promote new ventures and assist upcoming entrepreneurs by creating a rich ecosystem. The first startup warehouse will be set up at Tidal Park in Chennai.

Chief Minister of Madhya Pradesh, Shivraj Singh Chouhan has also announced that the state government is launching an INR 100 Cr. venture capital fund to incubate and promote startups in the state.

According to a recent Nasscom report, India is the fourth largest base for young businesses in the world with more than 3,100 tech startups. Further, this is expected to increase to 11,500 by 2020 and the industry is expected to create about 2,50,000 jobs in the next five years. Presently, the country has about 3,100 startups of which 868 are in Bangalore.

During the last year Union Budget 2014-15, the government had announced the INR 10000 Cr fund for startups but did not give the clarity of working. Startup ecosystem is still waiting for the exact status and norms for the fund launched. Therefore, the actual implementation of policies and initiatives launched for startups are lacking somewhere on ground level. The budget announcements are always easy to make, however turning them into reality has always been a difficult task for government.

Author

Gopi Arora

Inc42 Staff
News Editor @Inc42. Prior to this, worked at Bhaskar News, SME News, Dainik Jagran & Euromoney Institutional Investor Magazine.
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