Lok Sabha MP Badruddin Ajmal raised questions on Thursday about the details of the schemes under the ‘Start up India’, initiative, the benefits of the scheme, and the details of the fund allocation.
In a written reply in the Lower House, Union Minister of State for Commerce and Industry Som Parkash categorically said that the Central government launched the Startup India initiative on January 16, 2016, with the aim of creating a strong ecosystem for nurturing innovation and startups and promoting investments in the country’s startup ecosystem.
The minister went on to say that the flagship schemes under the Startup India initiative, are the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), and the Credit Guarantee Scheme for Startups (CGSS). These initiatives provide support to startups at different stages of their growth, enabling them to progress to a point where they can secure investments from venture capitalists or angel investors, or obtain loans from commercial banks and financial institutions. The minister, Som Parkash, further added that the Startup India Seed Fund Scheme has been approved for a period of 4 years, starting from 2021–22, with an amount of Rs 945 crore. The Experts Advisory Committee (EAC) evaluates and selects incubators for fund allocation under the scheme. The approved incubators select startups in accordance with the guidelines of the scheme. SISFS is implemented as of April 1, 2021.
Regarding funds the minister said that the Fund of Funds for Startups (FFS) Scheme, established in 2016 with an amount of Rs. 10,000 crore, is being operated through the Small Industries Development Bank of India (SIDBI). It provides capital to Alternative Investment Funds (AIFs) registered with SEBI, which in turn invest in startups. AIFs supported under FFS are required to invest at least twice the amount committed under FFS in startups.