The Centre’s move to assist start-ups and SMEs appears to have gathered steam, with fund-of-funds India Aspiration Fund (IAF) already sanctioning ₹700-800 crore of its first tranche of ₹2,000 crore to domestic venture capital firms.

The Fund is an attempt to boost the start-up ecosystem and harness the potential of India’s innovators and entrepreneurs by providing them with a network of domestic financers, said Minister of State for Finance Jayant Sinha.

“Almost 90-95 per cent of venture capital funding comes from outside India. India’s innovation is being funded by the Teachers Pension Plan of Ontario, the Stanford Endowment, the Norwegian sovereign wealth fund, by Temasek (Singapore’s sovereign fund). We need to fund Indian innovation here in India, and we need to build venture capital here,” he said.

He was addressing a gathering at the Global Business Forum (GBF), an initiative of the IIT Bombay Alumni Association. At this year’s GBF, held in Goa, technology innovators from IIT Bombay and Delhi interacted with the nation’s political decision makers.

“We have studied the best practices around the world. We created the India Aspiration Fund so that we can have domestic capital funding Indian firms that are working on India’s problems,” said Sinha, adding that India is expected to surpass the UK in terms of number of start-ups launched, and would soon mimic the US in its start-up ecosystem.

He added that the fund is expected to catalyse tens of thousands of crore of equity investment in start-ups and SMEs. “We know and recognise that if we have to create millions of jobs for a young workforce, they are going to come from companies like Flipkart, Snapdeal and Ola. We have to give encouragement to our entrepreneurs for large-scale businesses as well as for micro enterprises,” he added.

(The writer was in Goa at the invitation of the Global Business Forum)

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