Budget 2025 for startups: Finance Minister Nirmala Sitharaman on Saturday announced a new Fund of Funds for startups to be set up with a fresh contribution of Rs 10,000 crore in addition to the existing government contribution of Rs 10,000 crore. The minister said that under the existing Fund of Funds for startups, alternative investment funds (AIFs) have received commitments of more than Rs 91,000 crore.
Sitharaman also announced a new scheme for 5 lakh women, SC-ST first time entrepreneurs to provide term loans up to Rs 2 crore during the next five years. The scheme will also offer online capacity building for entrepreneurship and managerial skills.
The Fund of Funds for Startups scheme with a corpus of Rs 10,000 crore was set up in 2016 to meet the funding needs of startups. By 2024, Rs 11,148 crore was committed, catalysing investments of Rs 21,221.36 crore in 1,165 startups, said the Commerce Ministry in a statement in January this year.
DPIIT is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS. The total corpus of Rs 10,000 crore is envisaged to be provided over the 14th and 15th Finance Commission cycles based on the progress of the scheme and the availability of funds.
Meanwhile, Sitharaman on Saturday also announced increasing credit guarantee cover under the credit guarantee scheme for startups from current Rs 10 crore to Rs 20 crore while reducing the guarantee fee to 1 per cent for lenders for loans in 27 focus sectors.
The minister also said that a DeepTech Fund of Funds will be explored to catalyze the next-generation startups as part of the private sector-driven Research, Development and Innovation initiative announced in last year’s July budget. Sitharaman announced allocating Rs 20,000 crore for the initiative in this year’s budget.