Kerala Budget 2024: INR 90 Cr Set Aside To Fuel Local Startup Ecosystem

The Kerala government announced a number of measures and sops in the state’s Budget for 2024-25, presented on Monday (February 5), to promote the local startup ecosystem.

The Budget has earmarked INR 90.52 Cr towards the ‘Kerala Startup Mission’ to fuel startups in the state. Of this, INR 20 Cr has been set aside for the establishment of a ‘Technology Innovation Zone’ in Kochi, while the remaining has been allocated for the youth entrepreneurship development programmes. 

Besides, the government has also committed an additional allocation of INR 30 Cr to accelerate startup investments via its Fund of Funds scheme. 

In his budget speech, Kerala’s finance minister KN Balagopal said that funds worth INR 46.10 Cr have been allocated for the scheme so far, whose investment value has grown 3.9X since then. 

He also said that an additional INR 6 Cr has been set aside in this year’s Budget for the ‘Innovation Acceleration Scheme’ to support startup initiatives. The government has also earmarked an amount of INR 10 Cr to expand its coworking centres, LEAP, across the state. 

Balagopal also said that the Kerala Startup Mission will set up work pods that will cater to entrepreneurs from other states. 

“The Startup Mission was able to generate 50,000 job opportunities in the state and raise INR 5,500 Cr as investments to startups via venture capital funding,” said the minister.

Bullish about the startup ecosystem in the state, Balagopal also said that the number of startups registered in the state has crossed the 5,000-mark. He said SaaS giant Zoho’s new campus at Kottarakkara will further foster the growth of startups and create jobs.

Interestingly, the minister also took cognisance of the challenges faced by brick and mortar retailers amid the rise of ecommerce platforms.

“The retail sector is facing a crisis worldwide. The trading community in Kerala is also grappling with major challenges, primarily due to the emergence of large retail chains, shopping malls, and online marketplaces,” said Balagopal.

Noting that ecommerce giants dominate the retail space on the back of their ability to leverage new technologies and economies of scale, Balagopal proposed the formation of groups, comprising local retailers, to help traditional players address the challenge. 

“Purchasing commodities together on a large scale from manufacturers, supply chain management systems like logistics, inventory management etc., all of them have to be taken up collectively. Digital technology, modern management techniques and artificial intelligence have to be utilised so as to support the same. Our universities and management institutions will be able to formulate the required technical framework,” added the minister. 

The slew of sops come just days after the Kerala government proposed the formulation of a comprehensive policy for AVGC-XR (animation, visual effects, gaming, comics and extended reality). The draft policy is slated to be made public soon to gather feedback from industry stakeholders.