The Minister of State for Electronics and IT Rajeev Chandrasekhar said that the government will create a new equity fund for start-ups with a 20 percent limited stake to provide additional capital support to the entrepreneurs.
The fund will be managed by private fund managers, Chandrasekhar said, adding that “this will create required private equity capital as an addition to what exists today”. The government has already put in place some of the funds like the Startup India Seed Fund Scheme (SISFS) with an outlay of Rs 945 crore to help start-ups in meeting their capital requirement. In the Union Budget 2022, Rs 283.5 Cr has been reserved for the SISFS.
Startups that are registered and recognised by the Department for Promotion of Industry and Internal Trade (DPIIT), the implementation agency for SISFS, will be eligible for funding. Some states, including Karnataka, Uttar Pradesh, Bihar, Gujarat and Rajasthan, have put in place funds to support start-ups.
In an event conducted by the Confederation of Indian Industry (CII) Chandrasekhar said, “It’s a great time to be an entrepreneur. It is a great time to be a start-up. It is an absolute mission and article of faith for our Prime Minister (Narendra Modi) and our government that the expansion of the start-up ecosystem, funding it, fuelling it, and creating innovations in the start-up ecosystem…are out there in a post-COVID-19 world in a manner where intellectual properties are created.”
In her Budget speech this month, Finance Minister Nirmala Sitharaman had announced the setting up of thematic funds for blended finance in the ‘sunrise’ sectors of digital economy, deeptech, agritech, climate action, and pharma. Blended finance mixes public capital with market-based funds to essentially mobilise additional commercial funding towards sustainable development.
