India will launch ₹1,000-crore seed fund for start-ups: PM

Prime Minister Narendra Modi has said that India will launch a ‘Startup India Seed Fund’ with a ₹1,000-crore corpus to help start-ups get seed money for starting their ventures and help them grow.

In the future, the government will also help start-ups raise debt capital through guarantees, the PM said speaking at the ‘Prarambh: Start-up India International Summit’ on Saturday.

The two-day summit, marking the fifth anniversary of the Start-up India initiative, brought together innovators, entrepreneurs, investors, regulators, industry leaders, and academicians from India and across the world including BIMSTEC countries.

“To ensure that our start-ups don’t fall short of funds, our country has taken a lot of steps. In this series, I want to make another important announcement today at this event. To help start-ups get initial funding, the country will launch a ₹1,000-crore Start-up India Seed Fund. This fund will help in setting up new start-ups and aid them in growth,” Modi said.

Debt capital

Through the ‘fund of funds’ scheme, start-ups are already being helped by the government to raise equity capital. In future, the government, through guarantees, will help start-ups to raise debt capital, the PM added.

The Department for Promotion of Industry and Internal Trade (DPIIT) has taken up the matter of implementation of both the proposed Start-up India Seed Fund Scheme and the Credit Guarantee Scheme for Start-ups (with corpus of ₹2,000 crore) with the Finance Ministry in the forthcoming Budget, sources had shared with BusinessLine.

Start-ups are eager for the announcement of both funds as overall venture capital funding dropped 30 per cent, from $14 billion in 2019 to $10 billion in 2020, as per industry estimates.

During the pandemic, when big companies were struggling to survive around the world, in India a new army of start-ups was being formed to cater to diverse needs. The start-ups looked for opportunity in adversity and at the time of calamity brought in faith, Modi said, adding that the success story of start ups is not limited to cities.

BIMSTEC nations

As many as 1,20,000 registrations took place on Friday, the first day of the summit, which was inaugurated by Commerce & Industry Minister Piyush Goyal and hosted dignitaries and stakeholders from BIMSTEC member States.

The PM noted that BIMSTEC countries, which include Bangladesh, Bhutan, India, Nepal, Sri Lanka, Myanmar and Thailand, were collaborating for promotion of start-ups in line with their cooperation in other areas such as digital connectivity, space, agriculture, environment and defence. “The more our start-ups will be strengthened, the more our economies will prosper,” he said.