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What is the News? Union Minister of Commerce & Industry launches the Startup India Seed Fund Scheme (SISFS).
About Startup India Seed Fund Scheme (SISFS):
- The scheme was announced during the Prarambh: the ‘Startup India International Summit’. Which marks the 5-year anniversary of the Startup India initiative.
- Firstly, Startup India Seed Fund Scheme(SISFS) aims to provide financial assistance to startups. Assistance is provided for proof of concept, prototype development, product trials, market entry, and commercialization.
- Secondly, it would help to grow startups to a beginner’s level. After that, startups will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions.
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- The Department for Promotion of Industry and Internal Trade (DPIIT) constituted An Experts Advisory Committee(EAC). Which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme.
- Firstly, Eligible incubators throughout India will hand out funding to eligible startups across India.
- Secondly, Grants of up to Rs 5 Crores shall be provided to the eligible incubators selected by the EAC.
- Thirdly, the selected incubators shall provide grants of up to Rs 20 lakhs for validation of Proof of Concept, or prototype development, or product trials to startups.
- Finally, Startups will further receive investments of up to Rs 50 lakhs for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
- The scheme will have a corpus of Rs. 945 Crore. This will be divided over the next 4 years.
Significance of the scheme:
- The SISFS scheme will help startups in:
- Secure seed funding
- Inspire innovation
- Support transformative ideas
- Facilitate implementation and
- Start startup revolution.
- The Scheme will also create a robust startup ecosystem particularly in Tier 2 and Tier 3 towns of India. These towns lack adequate funding facilities for startups.