Govt Plans INR 1,000 Crore Fund For Startups In Priority Areas
To boost startups, DPIIT has recommended regulatory changes aimed at promoting venture capital and angel investments, especially from Indian investors.
The government proposes to introduce a slew of reforms and another fund to boost startups that are focussed on priority areas such as rural healthcare, water, and waste management, clean energy solutions, cybersecurity, and drones.
The Department for Promotion of Industry and Internal Trade (DPIIT) plans to set up an India Startup Fund with an initial amount of Rs 1,000 crore.
Startups focused on waste management, clean energy solutions to get seed funding
The department for the promotion of industry & internal trade (DPIIT) is planning to set up an India Startup Fund with an initial corpus of Rs.10 billion, reported Economic Times. The proposal is to provide seed funds to 5,000 startups that are focused on priority areas such as rural healthcare, water, and waste management, clean energy solutions, cybersecurity, and drones. The DPIIT may consider including startups focused on other technologies like the Internet of Things and artificial intelligence at a later stage. The startup dedicated fund is separate from the fund of funds for startups (FFS) which was set up in 2016 under the Small Industries Development Bank of India. The Rs.100 billion FFS makes downstream investments in venture capital and alternative investment funds that in turn invest in startups.
“The government needs to supply seed funds for hi-tech, innovative startups. The proposal is to produce seed funds to five,000 startups in priority areas,” a senior government official responsive to the proposal told ET.
The dedicated fund, projected within the department’s 100-day Action arrange, is break away the Fund of Funds for Startups (FFS), that was found out in 2016 underneath the little Industries Development Bank of Asian nation. The Rs 10,000 large integer fund of funds makes downstream investments in risk capital and various assets that successively invest in startups.
A major boost to Tech startups
Startups focussed on other technologies like the Internet of Things and artificial intelligence will also be included gradually, the official added.
To boost startups, DPIIT has suggested regulative changes aimed toward promoting risk capital and angel investments, particularly from Indian investors.
The possible changes would be added to those declared in Gregorian calendar month aimed toward liberating investors and entrepreneurs from the supposed angel tax. the govt. enlarged the exemption threshold and unbroken investments by listed corporations of bound minimum size, risk capital funds and non-residents in startups outside the scope of the tax to bring relief to corporations registered as startups with the department.
Until now, the department has recognized as several as seventeen,984 startups. Besides, the govt. has pitched to treat outsourced R&D efforts on par with in-house R&D for incentivization functions and easier movement of researchers between domain, public analysis establishments, entrepreneurship, and trade.
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