Startups to secure Rs 2000-cr funding from Cabinet by July

Startups to get funding by the Union Cabinet

Expectations are high that the Union Cabinet might approve a kitty of around Rs 2000 crore credit guarantee fund by July-end in a move to provide funding facilities to startups, according to a top official on Monday.

Ramesh Abhishek, Secretary, DIPP, said that the fund would be used to lend to startups without any collateral. He further said that this amount would be disbursed over a period of three years and had been approved by the finance ministry last week.

“One startup will get a maximum of Rs 5 crore. We are hoping to get the cabinet approval on this by end of July to operationalise this fund,” he said during the launch of Startup India Hub portal. He said that about 7500 startups will get benefited from this scheme and it would generate an additional funding of Rs 15,000 crore.

Abhishek said that during the launch of Startup India action plan in January 2016, Rs 960 crore of funds were disbursed to different startups. The DIPP has put 1,000 facilitators for intellectual property (IPR)-related issues besides setting of 547 tinkering labs under Atal Innovation Mission.

358 startups were facilitated for IPR, 1333 were recognised as startups, 39 startups were given income tax benefits and we are reviewing all other cases regarding this. These numbers are going to multiply this year as we have changed the definition of startups,” he said, adding that under the ‘Fund of Funds’ scheme, over Rs 1,100 crore got disbursed last fiscal.

The Startup India Hub portal feels this move would help budding entrepreneurs collect information on government’s scheme about mentors, funders and accelerators. The DIPP has sought Rs 1600 more from the finance ministry.

Will this new move by the government bring in more structure and reform in the startup space? Do share your views.

Source: PTI