Here's How Modi Govt's INR 1,000 Cr Fund Will Push India's Startup Ecosystem
While announcing the fund, PM Modi said that with INR 1,000 crore there will be no shortage of seed money for early-stage startups
Prime Minister Narendra Modi earlier this week announced a INR 1,000-crore fund for early-stage startups in the country. Named ‘Startup India Seed Fund’, this is another big push undertaken by the Modi government to bolster India’s startup ecosystem which has already turned eyeballs during the pandemic-hit year.
While addressing ‘Prarambh: Startup India International Summit’, PM Modi said that startups are changing the demographic characteristics of today’s business. He took cognisance of women participation in the space and said that around 44 per cent of recognized startups have women directors and the number of women working in these startups are very high.
While announcing the fund, PM Modi said with INR 1,000 crore, there will be no shortage of seed money for early-stage startups.
“India is working for a startup ecosystem based on the mantra ‘Of the Youth, By the Youth, For the Youth’, We have to fix our goals for the next five years and these goals should be that our startups, our unicorns should emerge as global giants and lead in futuristic technologies,” he said.
India—which now has the third-biggest startup ecosystem with 41,000 startups—has over 30 unicorns, a big leap from four unicorns in 2015.
Further sharing details, PM Modi said the seed fund can be availed by the startup through selected incubators across India. Around INR 945 crore has been allocated for the scheme for 2021-25.
The scheme shall offer startups upto INR 20 lakh as grant for ‘proof of concept’. This is an important step as a lot of budding entrepreneurs come up with ground-breaking ideas but fail to materialize it due to lack of funds. This step will further aspire small town entrepreneurs who have a box-full of ideas but fail to make their presence felt while competing against companies with big pockets.
Though India saw a record number of startups entering the unicorn club in 2020, the number of new startup launches according to a report fell drastically to 1,050 compared with 3,500 in 2019.
The scheme will offer upto INR 50 lakh through convertible debentures or debt-linked instruments for commercialization.
He further said that through the government procurement portal GeM, startups are getting new opportunities as 8,000 startups are registered on GeM portal and they have done the business of INR 2,300 crore through GeM.