Commerce Ministry Likely To Seek More Funds To Boost Innovation In Startup Ecosystem : Report

The commerce and industry ministry is likely to seek more funds for startups in the forthcoming Budget, set to be announced by the new government, in an effort to boost innovation across the country.

As per PTI’s report, the new government may announce the Budget for 2024-25 in July.

The current seed fund scheme, introduced in April 2021 with a corpus of INR 945 Cr is set to end this year and the ministry is considering proposing a new scheme along similar lines.

The Startup India Seed Fund Scheme is among the host of schemes, including the Fund of Funds for Startups (FFS) and Credit Guarantee Scheme for Startups (CGSS), launched by the government during the last few years to expand the country’s startup ecosystem.

The fund, allocated over four years, was designed to provide seed funding to eligible startups through incubators across India.

Back in 2021, the government announced the launch of the ‘Startup India Seed Fund’ to offer financial assistance to startups for proofs of concept, prototype development, product trials, market-entry and commercialisation of products or ideas.

Easy access to capital is crucial for entrepreneurs in the early stages of their enterprises, another official stated. The funding needed at this stage can often determine the success or failure of startups with promising business ideas.

The ministry is also anticipated to propose a dedicated policy for deep tech startups.

Over 1,000 startups were selected by approved incubators under the Startup India Seed Fund Scheme (SISFS) to provide cumulative financial support of INR 177 Cr as of April 30, 2023, the government informed the Parliament last year.

Startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible to get funding via one of the government-recognised incubators under the SISFS. Startups need to have at least 51% shareholding by Indian promoters to be eligible to get financial assistance under the scheme.

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