Government of India (GoI) wants to reverse the trend of successful start-ups relocating abroad to receive venture funding.
Thus, on 22nd June, GoI has approved a US$ 1.5 Bn (Rs 10,000 crore) ‘Fund of Funds for Startups’. The government hopes to generate employment for 18 lakh persons through the startups funded. The decision was taken in the Union Cabinet meeting chaired by the Prime Minister Shri N. M. Modi.
The official release stated, “The Cabinet has approved the establishment of ‘Fund of Funds for Startups’ (FFS) at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF), registered with SEBI which would extend funding support to startups.” The fund This would encompass support at seed stage, early stage and growth stage.
This development seems to be in line with the ‘Startup India Action Plan’ unveiled by the government in January.
Interestingly, the official statement goes onto to explain that the corpus shall be built up over the 14th and 15th Finance Commission cycles, subject to progress of the scheme and availability of funds!
Between the PMO (prime ministers’ office) and the bureaucracy–the latter seem to make their mark–always!
