The ministry of commerce and industry may seek an increase in the allocation for the Startup India Seed Fund Scheme (SISFS) in the coming Budget as the demand and off-take have been more than anticipated, a senior official said.
The scheme was announced in 2021-22 with a corpus of Rs 945 crore for four years. More than Rs 740 crore has been approved to more than 190 incubators under the scheme till October 2023. Of the total amount, Rs 400 crore has been disbursed and another Rs 175 crore is expected to be spent this financial year. The scheme needs a top-up, the official said.
At the time of top-up, the government might also consider replacing SISFS with a new scheme meeting similar objectives to accommodate the National Deep Tech Startup Policy.
Under the SISFS, the government provides financial assistance to seed-stage startups for proof of concept, prototype development, product trials, market entry and commercialisation. The fund enables startups to graduate to a level where they can raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions. Under the scheme, funds are disbursed to startups through eligible incubators across India.
There are more than 1.17 lakh government-registered startups in the country. They are eligible for income tax and other benefits. These recognised startups have been reported to have created more than 12.42 lakh direct jobs. The target is to get to 10 million jobs in startups by 2030.
Startups are a focus of the government’s efforts to drive innovation, growth and jobs. It has declared its intention to come out with policies to make India the startup capital of the world through various programmes that ensure easier regulations, funding and market access.
The Startup India initiative has been running since 2016, along with an action plan to create a vibrant startup ecosystem in the country.
The action plan comprises 19 action items spanning various areas such as simplification and handholding, funding support and incentive, and industry-academia partnership and incubation.
