The department for promotion of industry and internal trade (DPIIT) will seek an increase in corpus of Startup India Seed Fund Scheme (SISFS) as it accelerates pace of funding to incubators for supporting early stage companies across India.
“We are trying to increase the pace of the scheme by 20% and formalise the proposal for higher funding in the next 5-6 months,” joint secretary in the department, Manmeet K Nanda told reporters.
The scheme, which was launched in April 2021 and will run through March 2025, has a corpus of Rs 945 crore, of which Rs 611 crore has been allocated to incubators. Of the total allocated to incubators, Rs 61 crore has been released under the seed funding scheme to startups.
The scheme was launched when Covid-related restrictions were in place and things have started normalising only recently so the demand for funding is expected to increase further, she said.
Over the four-year period of the scheme, the government expects to support 3,600 entrepreneurs through 300 incubators.
The seed scheme is sector agnostic and provides grants to the tune of Rs 20 lakh and debt funding of up to Rs 70 lakh to an individual startup while incubators earn 5% management fee.
So far, 160 incubators across 25 states and union territories have been selected to run the scheme and the number of startups supported stands at 1,030.
Maximum number of startups, at 170, under the scheme are in the healthcare and life sciences sector. Among states, Maharashtra tops the list in number of startups backed by the fund.
The fund provides financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialisation.
On its part, the DPIIT is undertaking a third-party assessment of Startup India Seed Fund Scheme to see its impact on the ground.
“A third-party impact assessment of the Startup India Seed Fund Scheme is underway. It is being done by National Institute of Financial Management (NIFM). They will do an independent review of how the scheme is actually benefited,” Nanda said.
“NIFM will evaluate the performance of the startups, incubators and see how this funding… led to greater opportunities and will also give us feedback on how we can improve our work,” she said, adding that about 98,000 startups have been registered with DPIIT.