In a recent Union Cabinet meeting chaired by PM Narendra Modi, finally, the government approved the INR 10, 000 crore corpus of ‘Fund of Funds for Startups’.
This is in line with the ‘Startup India Action Plan’ unveiled by the government in January. The fund aims to generate employment for 18 lakh persons on full deployment and will support seed stage, early stage and growth stage startups.
“A corpus of INR 10,000 crore could potentially be the nucleus for catalysing INR 60,000 crore of equity investment and twice as much debt investment,” an official statement said.
The expertise of SIDBI (Small Industries Development Bank of India) would be utilised to manage the day-to-day operations of the fund.
As said, the corpus shall be built up over the 14th and 15th Finance Commission cycles, subject to progress of the scheme and availability of funds. An amount of INR 500 crore has already been provided to the corpus of FFS in 2015-16 and INR 600 crore earmarked in the 2016-17.
Further provisions will be made as grant assistance through gross budgetary support by Department of Industrial Policy and Promotion (DIPP) which will monitor and review performance in line with the ‘Start up India Action Plan.’
Recently, the approval of only one out of 250 applications has led to an increased agitation in the startups. To combat that, DIPP has planned a strategy to upgrade the action plan and get more enterprises to take part in it.
The startups will no longer need a certificate of recognition from the government to access legal help for filing patents. Not only this, the service would be free, and there are also plans to impose a cap on fees that can be charged by incubators for certifying a startup as an “innovative business.”