Start-Ups: More than three years after the launch of Start-Up India scheme by Prime Minister Modi, now all 29 states have 6 union territories have regonised start ups.
Start Ups: Prime Minister Narendra Modi’s flagship initiative to boost entrepreneurship in the country has now spread across all the states and union territories after three years of its launch. Prime Minister Modi has announced the scheme on republic day in 2015 and a 19 point action plan to arrange funding for start-ups was formally launched in January 2016. Within three and a half years after its launch, all 29 states and 6 union territories now have recognised start-ups.
According to the latest official information, the country has nearly 20,000 recognised start ups.
“There are 19,747 recognised startups under the initiative across 513 districts covering all 29 States and 6 Union Territories,” Som Prakash, minister of state in the ministry of commerce and industry informed the Lok Sabha in response to a question.
Former finance minister Arun Jaitley had announced a slew of relaxations for Start-up India scheme in 2016 budget. These measures included tax relief, easy funding and hand-holding of start-ups to help them grow.
The government also informed the Lok Sabha that no bank-wise targets are fixed under the Start-up India scheme as the scheme does not have any loan component. However, the government helps them to raise funds through SIDBI.
SIDBI has created a Rs 10,000 crore Fund of Funds for Start-ups. However, this fund managed by SIDBI does not directly invest in start-ups. SIDBI helps recognised start-ups to raise funds through SEBI registered Alternate Investment Funds (AIFs).
The FFS (Fund of Funds for Start-ups) managed by the SIDBI, helps Alternate Investment Funds (AIFs) to invest equity and equity-linked instruments of various startups during the initial stage, seed-stage and also during the growth-stage.
In this year’s budget Nirmala Sitharaman announced a slew of measures to provide relief to start-ups. Her budget announcement underlined the Modi government’s intent to provide long term support to start-ups and entrepreneurs in the country.
“The numerous amendments proposed by the finance minister in the finance bill 2019 and tax policy road map provided in the budget speech confirms government’s agenda of providing a conducive environment to start-ups and raising India’s ranking in ease of doing business index,” Gaurav Chadha, partner, tax & regulatory services of EY India told Financial Express Online.
According to the latest figures given by the Department for Promotion of Industry and Internal Trade (DPIIT), the funding of Rs 3,243 crore has already been committed.
Start-ups and SMEs are considered crucial for the creation of jobs in the country. According to the latest official data, 251 start-ups funded under the FFS fund managed by SIDBI have created on an average 45 jobs per start-up. SEBI has 49 registered alternative investment funds (AIFs) that have received funding support from SIDBI. These AIFs that received funding from SIDBI’s FFS, have invested Rs 1,647 crore in 251 start-ups.
The government has also earmarked 10% of the total fund of Rs 10,000 for women-led start-ups.