Last updated on August 22nd, 2016 at 03:04 pm
Indian government has approved Rs 10,000 crore ‘Fund of Funds for Startups’ to support the startups with an aim to generate employment for 18 lakh persons.
“The fund is expected to generate employment for 18 lakh persons on full deployment…A corpus of Rs 10,000 crore could potentially be the nucleus for catalyzing Rs 60,000 crore of equity investment and twice as much debt investment.” An amount of ₹500 crore has already been provided to the corpus in 2015-16 and ₹600 crore earmarked in 2016-17.
This would provide a stable and predictable source of funding for start-up enterprises and thereby facilitate large-scale job creation. Further provisions will be made as grant assistance through gross budgetary support by the Department of Industrial Policy and Promotion, which will monitor and review performance in line with the ‘Start-up India Action Plan’.
The government said SIDBI’s expertise would be used to manage the day-to-day operations of the fund. The monitoring and review of performance would be linked to the implementation of the action plan to enable execution as per timelines and milestones.
The move assumes significance as start-ups face several challenges such as limited availability of domestic risk capital, constraints of conventional bank finance, information asymmetry and lack of hand-holding support.
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