With an aim to boost the startup ecosystem of the country, the Modi-led NDA government with much fanfare launched Rs 10,000-crore Fund-of-Funds for Start-ups (FFS) some 28 months back.
With an aim to boost the startup ecosystem of the country, the Modi-led NDA government with much fanfare launched Rs 10,000-crore Fund-of-Funds for Start-ups (FFS) some 28 months back. However, the plan is currently not churning out many success stories as funding appears to have dried up all of a sudden. “Small Industries Development Bank of India (SIDBI) has so far committed Rs 1,285 crore to 27 local venture capital funds under the FFS scheme, of which Rs 141 crore —only about 11 per cent — has been disbursed to these funds till April 2018. The funds are then expected to route the money to startups,” says The Indian Express report.
The Department of Industrial Policy and Promotion (DIPP) is learnt to have undertaken before a Parliamentary panel that no release will be made to the fund manager SIDBI during FY18 and FY19, the Indian Express report added.
The decision to curtail funding to the state-owned SIDBI, which manages the FFS and acts as a limited partner in these venture capital funds (also called Alternate Investment Funds or AIFs) that draw capital from the FFS, has been taken by the department citing “unspent balance, the report adds further.
Answering the query from The Indian Express on DIPP’s undertaking before the Parliamentary Panel that “no releases” of funds is expected during 2017-18 and 2018-19, SIDBI said that alongside the Rs 600 crore that it has received from DIPP so far, it has also got an assurance letter authorising it “to make further commitments of Rs 1,600 crore to AIFs”.