Lok Sabha Question No. 535 (UNSTARRED), answered on 2023-12-06
Subject: Startup India Programme
Ministry: COMMERCE AND INDUSTRY
Asked by: Ramdas Chandrabhanji Tadas

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 535.

TO BE ANSWERED ON WEDNESDAY, THE 06 th  DECEMBER, 2023.

## STARTUP INDIA PROGRAMME

## 535.   SHRI RAMDAS C. TADAS:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य एवं उद्योग मंत्री

- (a) whether the Government has achieved the goals and objectives set under the Startup India programme;
- (b) if  so, whether the Government proposes to launch some schemes under the Startup India programme; and
- (c) if so, the details of the said schemes including the terms and conditions thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री सोम प्रकाश ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI SOM PARKASH)

- (a) to (c): The Startup India initiative was launched by the Government on  16th January 2016 to  build  a  strong  ecosystem  for  nurturing  innovation,  startups  and  encouraging investments in the startup ecosystem of the country.

In  order  to  meet  these  objectives,  the  Government  unveiled  an  Action  Plan  for startups  comprising  of  schemes  and  incentives  envisaged  to  create  a  vibrant startup ecosystem in the country. The Action Plan comprises of 19 action items spanning across areas such as 'Simplification and hand holding', 'Funding support and incentives' and 'Industry-academia partnership and incubation'.

For  attaining  specific  objectives,  various  programs  are  implemented  by  the Government under the Startup India initiative. As a result of sustained efforts, the Government has recognised 1,14,902 entities as startups as on 31st October 2023.

Realising  the  action  items  of  the  Startup  India  Action  Plan,  the  Government  is implementing  flagship  Schemes  under  Startup  India  initiative  namely,  Fund  of Funds for Startups (FFS), Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups(CGSS) to support startups at various stages of their  business  cycle  to  enable  startups  to  graduate  to  a  level  where  they  are able to raise investments or seek loans. The brief of each of these three Schemes along with link to their operational guidelines is placed at Annexure-I .

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## ANNEXURE REFERRED TO IN REPLY TO PARTS (a) to (c) OF THE LOK SABHA UNSTARRED QUESTION NO. 535 FOR ANSWER ON 06.12.2023.

## The brief of each of the three flagship Schemes implemented under Startup India initiative:

1. Startup India Seed Fund Scheme (SISFS): The Startup India Seed Fund Scheme has been approved for the period of 4 years starting from 2021-22 with a corpus of Rs. 945 crore. The Scheme aims to provide financial assistance to startups for proof  of  concept,  prototype  development,  product  trials,  market  entry  and commercialization. The Scheme is implemented from 1 st April 2021. The Experts Advisory Committee (EAC), under SISFS, is responsible for the overall execution and monitoring of SISFS. The EAC evaluates and selects incubators for allocation of  funds  under  the  Scheme.  As  per  provisions  of  the  Scheme,  the  selected incubators shortlist startups based on parameters outlined in Scheme guidelines. The operational guidelines of the Scheme is accessible at:

https://dpiit.gov.in/sites/default/files/Guidelines-FundScheme-Startup 29January2021.pdf

2. Fund of Funds for Startups (FFS) Scheme: The Fund of Funds for Startups Scheme was approved and established in June 2016 with a corpus of Rs 10,000 crore, with contribution spread over the 14th and 15th Finance Commission cycle based on progress of implementation, to provide much-needed boost to the Indian startup  ecosystem  and  enable  access  to  domestic  capital.  The  Scheme  is operationalized  by  Small  Industries  Development  Bank  of  India  (SIDBI).Under FFS, the Scheme does not directly invest in startups, instead provides capital to SEBI-registered Alternative Investment Funds (AIFs), known as daughter funds, who in turn invest money in growing Indian startups through equity and equitylinked  instruments.  SIDBI  has  been  given  the  mandate  of  operating  this  Fund through  selection  of  suitable  daughter  funds  and  overseeing  the  disbursal  of committed capital. AIFs supported under FFS are required to invest at least 2 times of the amount committed under FFS in startups. The operational guidelines for FFS is accessible at:

https://dpiit.gov.in/sites/default/files/Guidelines\_FFS\_07January2022.pdf

3. Credit Guarantee  Scheme  for  Startups  (CGSS): The Government  has established  the  Credit  Guarantee  Scheme  for  Startups  for  providing  credit guarantees  to  loans  extended  to  DPIIT  recognized  startups  by  Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Venture Debt Funds  (VDFs)  under  SEBI  registered  Alternative  Investment  Funds.  CGSS  is aimed at providing credit guarantee up to a specified limit against loans extended by Member Institutions (MIs) to finance eligible borrowers viz. DPIIT recognised startups.  CGSS  is  operationalized  by  the  National  Credit  Guarantee  Trustee Company Limited (NCGTC). The operational guidelines for CGSS is accessible at:

https://www.ncgtc.in/sites/default/files/cgss-\_notification.pdf

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