The Commerce and Industry Ministry is set to request additional funding for startups in the forthcoming Budget, scheduled to be announced by the new government in July, according to an official.
This move aims to strenghten innovation and entrepreneurial growth in India.
The current seed fund scheme, launched in April 2021 with a corpus of Rs 945 crore, is set to conclude in 2025.
The ministry is considering proposing a new scheme modeled after the existing one.
This seed fund initiative was designed to provide crucial financial support to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
Spanning four years, the fund distributed capital to eligible startups through incubators across the country. "Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise, and the capital required at this stage often presents a make-or-break situation for startups with good business ideas," another official emphasized.
India boasts over 1.17 lakh government-registered startups, which are eligible for income tax and other benefits. These recognized startups have generated over 12.42 lakh direct jobs, underscoring the significant impact of the government's support.
In addition to funding, the ministry is expected to propose a dedicated policy for deep tech startups.
Deep technology, founded on advanced scientific and technological breakthroughs, holds the potential to address some of India's most pressing societal issues due to its disruptive nature.
Promoting startups has been a critical focus of the previous government, which launched the Startup India initiative on January 16, 2016. This initiative included an action plan with schemes and incentives to create a vibrant startup ecosystem in the country.
The plan encompassed 19 action items across various areas, such as simplification and handholding, funding support and incentives, and industry-academia partnership and incubation.
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