Since the launch of the $1.5 Bn (INR 10,000 Cr) Fund Of Funds in 2016, the central government has had to face questions regarding slow disbursement of funds. But during a recent interaction with India’s young entrepreneurs, Prime Minister (PM) Narendra Modi clarified that about $192 Mn (INR 1285 Cr) has already been committed towards startups since the launch of the Fund of Funds.
He further iterated that the Fund of Funds has helped venture capital firms in the country leverage investments of almost $1.04 Bn (INR 7,000 Cr) among startups.
“When the Fund of Funds completes its fund-raising, the corpus will touch almost $2.09 Bn (INR 14,000 Cr). Thus, when the Fund of Funds matures over time, almost $14.9 Bn (INR 1 lakh Cr) will be available for startup funding in India. This is a huge contribution towards venture capital investing in the Indian startup ecosystem,” said Modi.
The PM made these comments while speaking to the entrepreneurs’ community yesterday (June 6) through the NaMo App and other media. Modi had previously connected with the beneficiaries of Ujjawala Yojna and Pradhanmantri Awas Yojna through the NaMo App.
During his speech, Modi also emphasised on the fact that the government has tried to bring the startup innovation culture, which was so far limited to Tier I cities, down to Tier II and Tier III cities and even to rural areas.
“About 44% of the startups are found in Tier II and Tier III cities today. These startups have been founded across the 419 districts of India. Moreover, almost 45% of the startups are founded by women entrepreneurs,” Modi said.
He further talked about the different initiatives and policy changes implemented by the government to boost the startup infrastructure, solve the various startup issues at the root level, and to bring new opportunities on the platform.
This includes the initiatives like the Startup Hub, India Hackathon, tax exemptions, funding support, funding for intellectual property, acceleration programmes under the Atal Labs, and encouraging states to have their own startup policies, among others.
However, when Inc42 connected with a few startuppers, many of them claimed that the process to avail these facilities is tedious and can take years.
Thus, going forward the government must address issues of this kind as well. Whether Modi has been able to reassure the Indian startup community of the upcoming benefits during his interaction with the entrepreneur community remains to be seen.