Tamil Nadu government today released 'Startup & Innovation policy 2018-2023' with a mission of providing an enabling and innovative ecosystem for startups registered in the State and to make Tamil Nadu a 'Global Innovation hub for startups' by 2023.
The mission shall aim for a minimum of 1,00,000 high skilled job creation, direct and indirect, in the Startup ecosystem.
Creation of at least 5000 technology startups of which at least 10 global high growth startups in social impact sectors; infrastructure support to strengthen existing mechanism in areas like Internet of Things (IOT), Artificial Intelligence (AI), Machine Learning (ML) and Software as a Service (SAAS) are some of the core objectives of the policy.
The policy also aims to collaborate with educational institutions to promote entrepreneurial spirit, reduce existing regulatory and tax burden on startups in the field of labour, pollution and building norms and also partner with reputed investors across the globe to bring investment to the Tamil Nadu startups.
It will also nurture aspiring entity or individuals (defined as ‘Start Steps’) who develops potentially scalable business model that can generate wealth and employment.
5-point action plan
The government has set a 5-point action plan for implementing the policies which includes creating ecosystems for encouraging innovations, ensuring resources availability to Startup ecosystem, enabling skill development and job creation, supporting social entrepreneurship and establishing global accessibility and partnerships.
Criteria to be recognized as a Startup in the state include registration under Tamil Nadu Startup and InnovaTN Mission (TANSIM), date of incorporation less than 7 years (less than 10 years in case of biotechnology, AI and ML startups) at the time and registration and turnover less than ₹25 crore in any of the financial years.
Entrepreneurship Development Institute of India (EDII) will act as a nodal agency to promote and facilitate startups and TANSIM headed by a full-time officer will advocate and oversee policies and programmes for promoting startups.
Startup funds
The State will set up Tamil Nadu Startup Fund of Funds for ₹250 crore which will be registered as an Alternative Investment Fund (AIF) managed by Small Industries Development Bank of India (SIDBI), for investment in startups and MSMEs. The government will invest ₹75 crore in the fund with the first tranche of ₹25 crore be allotted in FY 2019-2020.
The government will also create Tamil Nadu Startup Seed Grant Fund (TNSSGF) of ₹50 crore with an allotment of ₹5 crore in the first year in partnership with financial institutions and universities for supporting early stage financing requirements of the startups in the form of grants to fill the gap in fund requirement for research & innovations.