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Piyush Goyal Reveals Progress Made Under The Startup India Initiative

Piyush Goyal Reveals Progress Made Under The Startup India Initiative

SIDBI has committed over INR 3K Cr to 49 alternative investment funds

247 startups have received a total investment of INR 1625.73 Cr from the Fund of Funds

Startup India has mapped out 177 incubators, 360 mentors and 71 accelerators

During his address from the Red Fort on India’s Independence Day in 2015, Indian Prime Minister Narendra Modi revealed that the startup industry would be a key part of his economic agenda when he announced the ‘Startup India’ initiative.

After more than three years since that introduction, the government has now revealed some key updates about the progress made under its scheme. 

While replying to a question asked by BJP MLA Dharambir Singh in the Lok Sabha for details of the effectiveness of Startup India and the follow up on the scheme’s promises, Piyush Goyal, minister of commerce and industry, revealed that the Startup India mobile app gets over 123K monthly visits. Goyal also revealed that the Startup India team had engaged with over 100 venture capitalists and angel networks having worked out a deal flow arrangement with most of them. 

As part of the scheme, the government has mapped out 177 incubators, 360 mentors and 71 accelerators and also has a deal flow arrangement with banks including Union Bank, Yes Bank, Axis Bank, among others.  

Startup India’s Fund of Funds 

Launched in 2016, the Fund-of-Funds for startups is aimed at spreading a total sum of  $1.44 Bn (INR 10,000 Cr) to support 10K startups in India over the course of the next 12 years with the aim of creating 18 lakh jobs in the country.

But the initiative has come under criticism for being very slow is disbursing funds, regularly falling short of its capital allocation targets. 

In his reply, Goyal said that the Small Industries Development Bank of India (SIDBI) has committed INR 3123.20 Cr to 49 SEBI-registered Alternative Investment Funds (AIFs) and that INR 483.46 Cr have been drawn from the SIDBI Fund of Funds. 

In total, 247 startups have received a total investment of INR 1625.73 Cr under this scheme. The reply also revealed that government’s contribution is equal to 2x the funds received by venture funds and this is invested into DPIIT-recognised startups

According to a survey of 15K startups, only 163 startups had benefited from the Fund of Funds in the last three years till December 31, 2018, and the fund allocation and distribution are coming down further.

In a pre-budget survey done by Inc42 in the lead up to the Union Budget being released today, it was found that 85.3% of the respondents opted for the “Creation of an Innovation Fund in each sector to support startups in building proofs of concept.”

While 67.6% of respondents are of the opinion that the existing government emarketplace format is not enough and that the setup should be more open and encouraging.

Ease Of Doing Business & Driving Innovation 

As part of building intellectual property among startups in India, the government in 2017 had launched a scheme where startups would be eligible for 80% rebate in patent filing fees and 50% rebate in trademark filing fees. Additionally, startups would also be considered for expedited examination of patent applications to reduce the time taken in granting patents.

Goyal said 1,496 patent applications have been granted 80% rebate on filing fee while 2,761 trademark applications have been granted a 50% rebate on the filing fee.

And to help startups in their applications for IP or trademark, 425 patent facilitators and 606 trademark facilitators have been empanelled to provide free-of-charge services. 

The government also said that since the MCA has notified startups as “fast track firms”, this would allow ventures to wind up operations within 90 days vis-a-vis 180 days for other companies. 

Goyal further said that the public procurement norms have been relaxed for startups and that under and as part of the government’s effort to increase transactional engagement with startups 7,697 procurement orders worth INR 275 Cr have been received under the GeM Startup Runway scheme. 

Academic Engagement 

The government had earlier announced that it planned to set up seven research parks modelled after the Research Park at IIT Madras where incubation and joint R&D efforts between academia and the industry could take place. Goyal said that out of a total of INR 680 Cr, only INR 233 Cr have been disbursed till now. 

The seven locations who have received this are IIT Delhi,  IIT Kanpur, IIT Gandhinagar, IIT Mumbai, IIT Guwahati, IIT Kharagpur, IIT Hyderabad and IISc Bangalore.

Goyal also said that the NITI Aayog is working on to come up with an Annual Incubator Grand Challenge but did not reveal any more details of when that would be. 

The government is also planning to organise a Global Startup Conclave 2020 in February next year, which will be a 4-day “mega global event” like CES, one of the biggest consumer technology events in the world. Goyal said the intent of this event would be to position India as the next startup destination. 

Key Takeaways From Goyal’s Startup India Updates:

  • 8,878 schools selected for setting up Atal Tinkering Labs
  • 689 startups availed tax exemption on investments above fair market value
  • INR 150 Cr fund set up as a Fund of Funds to bio-incubators
  • 149 startups exempted from tax for a period of three years 
  • Over 318K users registered on the Startup India portal
  • 19,247 startups recognized by DPIIT
  • 3,157 mentor, investor and incubator connections established

Author

Shivam Srivastav

Inc42 Staff

I have covered a wide range of markets and worked on some of the biggest political and business stories in the U.S, Europe, and India.

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