Newsblare

newsblare logo

Sign in

Business Business Plans Economic & Finance Fintech Funding New startups Politics Startup Guides Startups

Govt to be 20% limited partner in an equity fund for startups

A new equity fund for start-ups set up by the govt would provide additional capital support to entrepreneurs. The govt would also be a 20% limited partner in the equity fund. 

Furthermore, Minister of State of Electronics and IT Rajeev Chandrasekhar said private fund managers would manage the corpus.

Govt creates equity fund for start-ups 

Finance Minister Nirmala Sitharaman announced the inception of government-backed funds. 

These government-backed funds would support significant sunrise sectors such as deep-tech, digital economy, climate action, agri-tech, and pharma. 

Furthermore, the govt already set up a Startup India Seed Fund Scheme estimated at Rs 945 crore. The SISFS supports start-ups to meet their capital requirements. 

At an event conducted by the Confederation of Indian Industry (CII), Chandrasekhar said, “The finance minister has announced that there will be such a fund where the government will be a 20% limited partner and it will be managed by private fund managers. 

There will be a fund that will be created and sponsored by the government of course but it will be managed like any other private fund. That will create required private equity capital as an addition to what exists today.” 

Start-ups in India

The SISFS received INR 283.5 Cr in the Union Budget 2022. Furthermore, INR 1,000 Cr would go for the Fund of Funds for Start-ups in the Budget. 

Nevertheless, the start-ups eligible for funding must be registered and recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). 

Moreover, the funding is for prototype development, market entry and commercialization, proof of concept, and product trials. 

So far, the DPIIT has recognized 42,813 Indian start-ups. 

Chandrasekhar also said, “It is an absolute mission and article of faith for our prime minister 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 world in a manner where intellectual properties are created.” 

Lastly,

Various states have set up funds to support start-ups, including Uttar Pradesh, Bihar, Karnataka, Rajasthan, and Gujarat. 

Also Read – World Bank expects the Indian economy to grow at 8.3%

1 Comment

Leave a Reply

Your email address will not be published.