Rs 10,000 crore ‘Fund of Funds for Startups’ approved by PM Narendra Modi-led Cabinet

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New Delhi | Published: June 22, 2016 4:24:30 PM

Giving a booster shot to startups, the Cabinet on Wednesday approved the establishment of Rs 10,000 crore "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.

Startups, seed, investmentAn 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. The Fund is expected to generate employment for 18 lakh persons on full deployment, the Cabinet release said. (Reuters)

Giving a booster shot to startups, the Cabinet on Wednesday approved the establishment of Rs 10,000 crore “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 Rs 10,000 crore corpus of FFS shall be built up over the 14th and 15th Finance Commission cycles subject to progress of the scheme and availability of funds. 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. The Fund is expected to generate employment for 18 lakh persons on full deployment, the Cabinet release said.

This is in line with the Start up India Action Plan unveiled by government in January 2016, the release stated.

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According to the government release, 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 Start up India Action Plan.

The FFS emanates from the Start up India Action Plan, an initiative of Department of Industrial Policy & Promotion (DIPP). “The expertise of SIDBI would be utilized to manage the day to day operations of the FFS. The monitoring and review of performance would be linked to the implementation of the Start Up Action Plan to enable execution as per timelines and milestones,” the release said.

“A corpus of Rs 10,000 crore could potentially be the nucleus for catalyzing Rs 60,000 crore of equity investment and twice as much debt investment. This would provide a stable and predictable source of funding for Start up enterprises and thereby facilitate large scale job creation,” the release concluded.

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