The government has allocated INR 1,000 Cr for the Fund of Funds for Startups INR 50 Cr has been allocated for the much-touted Startup India scheme in Budget 2022 from a revised estimate of INR 32.83 Cr Allocation for the Department for Promotion of Industry and Internal Trade (DPIIT) stood at INR 8,348 Cr for 2022-23.
The government has allocated INR 1,000 Cr for the Fund of Funds for Startups in the Budget 2022, which is lower than the revised estimate of about INR 1,330 Cr for the year 2021-22. The government, in 2016, had set up a Fund of Funds for Startups with a corpus of INR 10,000 Cr. The Small Industries Development Bank of India (SIDBI) is the operating agency for the fund. In addition to that, INR 283.5 Cr has been earmarked for the Startup India Seed Fund Scheme (SISFS) in the Union Budget 2022. This is higher than the revised Estimate of about INR 100 Cr for the year 2021-22. In April last year, the Centre had rolled out the SISFS which aims to provide financial assistance to startups for prototype development, product trials and market entry. The much-touted Startup India programme saw a budgetary allocation of INR 50 Cr in the Budget 2022, an increase from the previous revised estimate of INR 32.83 Cr in 2021-22. The Startup India is a flagship scheme of the Government of India that aims to foster entrepreneurship and promote innovation in the country.
On the other hand, the government has earmarked no funds for the credit guarantee fund. However, the cumulative budgetary allocation for the Department for Promotion of Industry and Internal Trade (DPIIT) stood at INR 8,348 Cr for 2022-23. Under the Startup India Seed Fund Scheme, the Govt has so far invested INR 8,045 Cr in 540 startups. In addition to that, as many as 58 incubators have been selected for the INR 233 Cr grant approved by the Centre. The Centre has also committed INR 6,495 Cr to as many as 80 Alternative Investment Funds to spur the growth of startups in the country. The Budget has received mixed reactions from the public and investors on the startup front. In an interview with a leading website, Aarin Capital Partner TV Mohandas Pai opined that budget 2022 was not a startup budget The Budget brought some cheer too for the entrepreneurs. The tax on long term capital gains from unlisted stocks was capped at 15% as opposed to 37% previously. The government also extended the tax holiday for startups by another year. The Union Budget 2022 also announced the setting up of thematic funds for blended finance in the ‘sunrise’ sectors of deeptech, agritech and climate action. The Centre’s share in the funding would be limited to just 20% and these funds will be managed by private fund managers.