Modi govt approves Rs 10,000 crore for startups; likely to generate over 18 lakh jobs

On 22 June, the government approved Rs 10,000 crore 'Fund of Funds for Startups' to support them with an objective to generate employment for over 18 lakh persons.

"The fund is expected to generate employment for 18 lakh persons on full deployment...A corpus of Rs 10,000 crore could potentially be the nucleus for catalysing Rs 60,000 crore of equity investment and twice as much debt investment," an official statement said.

The decision was taken in the Union Cabinet meeting chaired by Prime Minister Narendra Modi.

"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," it said.

This is in line with the 'Startup India Action Plan' unveiled by the government in January.

The corpus shall be built up over the 14th and 15th Finance Commission cycles, subject to progress of the scheme and availability of funds, it said.

"This would provide a stable and predictable source of funding for startup enterprises and thereby facilitate large scale job creation," it added.

An amount of Rs 500 crore has already been provided to the corpus of FFS in 2015-16 and Rs 600 crore earmarked in the 2016-17.

Further provisions will be made as grant assistance through gross budgetary Support by Department of Industrial Policy and Promotion (DIPP) which will monitor and review performance in line with the ' ..

This would encompass support at seed stage, early stage and growth stage, it said.

--PTI