Govt cuts Rs 3 crore from FY20 allocation for Startup India programme

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Updated: February 3, 2019 1:01:29 PM

According to the budget documents, the government in this year's budget reduced the allocated amount to Rs 25 crore from the revised estimate of Rs 28 crore in FY19.

Government launched Startup India programme on 16th January, 2016 to boost innovation and design.

The ambitious Startup India programme doesn’t seem to be among the top priorities for the government this financial year as it has reduced the allocation for the programme.

According to the budget documents, the government in this year’s budget reduced the allocated amount to Rs 25 crore from the revised estimate of Rs 28 crore in FY19, PTI reported.

Finance Minister Piyush Goyal kept startups and its investors out of purview from this year’s pro-farmer and middle-class budget apart from acknowledging the startup ecosystem to be the second largest in the world.

The contentious angel tax too didn’t find mention in the speech. Nonetheless, Goyal talked about the impact across various sectors that experts feel will indirectly help startups grow.

“Startups generate the highest number of new jobs per unit of invested capital compared to private or government investments. In most western economies, therefore individuals are encouraged to invest into startups by providing 33%-100% write-offs of the amount invested every year,” said Sushanto Mitra, Founder & CEO, Lead Angels – angel network based in Mumbai.

The government, however, increased allocation for Make in India programme to Rs 473.3 crore for 2019-20 from the revised estimate of Rs 149 crore in 2018-19.

The allocated amount for Make in India include Rs 232.02 crore for investment promotion, Rs 8.47 crore for implementation of national manufacturing policy, Rs 100 crore for fund of funds.

Startup India, launched on 16th January, 2016, has been the flagship programme of the government intended to boost innovation and design among Indian startups and eventually generate employment opportunities.

The programme focuses on 19 points including incubation centres, patent filing, tax exemptions, ease of setting up and doing business, funding through Rs 10,000 crore fund of funds, efficient exit route etc.

According to experts, the government’s plan of setting up a National Artificial Intelligence (AI) portal would give way for increased investments in AI startups.

“The move is going to boost investments in the AI start-ups, contributing towards India’s emergence as one of the global hubs for AI research and development, said early-stage fund Venture Catalysts co-founder and president Apoorv Ranjan Sharma.

The cumulative allocation for the department of industrial policy and promotion (DIPP) is also reduced to Rs 5,674.51 crore for 2019-20. The revised estimate of Rs 6,140.23 crore in 2018-19.

DIPP was recently renamed as the Department for Promotion of Industry and Internal Trade (DPIIT).

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