Lok Sabha Question No. 1350 (UNSTARRED), answered on 2016-07-25
Subject: Fund of Funds for start ups
Ministry: COMMERCE AND INDUSTRY
Asked by: SANTOSH AHLAWAT, POONAMBEN HEMATBHAI MAADAM, SUMEDHANAND SARASWATI

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

UNSTARRED QUESTION NO. 1350.

TO BE ANSWERED ON MONDAY, THE 25 TH  JULY, 2016.

## FUND OF FUNDS FOR START UPS

1350.  SHRIMATI SANTOSH AHLAWAT: SHRIMATI POONAMBEN MAADAM: SHRI SUMEDHANAND SARSWATI:

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

## वाणिज् यवव द्यग ं ्री

- (a) whether the Government has approved setting up of 'Fund of Funds for Startups' with a corpus of Rs. 10,000 crores at Small Industries Development Bank;
- (b) if so, the details thereof along with its key features and the time by which the said fund is likely to be set up;
- (c) whether this fund is expected to create a large number of jobs and if so, the details thereof along with the timeframe fixed for creating these jobs;
- (d) the details of the amount provided to the corpus of the Fund of Funds for start ups in 2015-16 along with the number of jobs generated therefrom; and
- (e) whether there is any mechanism to monitor and review the performance linked to the  implementation  of  the  action  plan  to  enable  execution  as  per  project  timeline and deliverables and if so, the details thereof?

## ANSWER

वाणिज् यवव द्यग ााज् यं ्रीस् वतं ््रभााा(स्रींतंरीिरंमलााीरीतंाांि( THE MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF COMMERCE & INDUSTRY (SHRIMATI NIRMALA SITHARAMAN)

- (a): Government has approved the establishment of 'Fund of Funds for Startups' (FFS).   The corpus of FFS is of INR 10,000 crore over a period of 4 years (i.e. INR 2500 crore per year) which shall be released subject to progress of the scheme and availability of funds.
- (b): Rs. 500 crore was released to Small Industries Development Bank of India (SIDBI) as first tranche in March 2016.   Rs. 600 crore has been provided in

the budget for the current financial year.  Applications received from various Alternative  Investment  Funds  (AIFs)  for  FFS  support  are  under  various stages of processing and approval.  Key features of FFS are annexed.

- (c) & (d): An  amount  of  Rs.  500  crore  has  been  provided  to  the  corpus  of  FFS  in 2015-16.  No  such  data  is  maintained  centrally  for  assessing  the  impact  of funds provided through FFS. However, such a provision of funds supplements  the  domestic  capital  of  startups  and  has  a  multiplier  effect  in stimulating economic growth leading to increased production and employment generation.
- (e): A  Monitoring  Committee  comprising  of  Department  of  Industrial  Policy  and Promotion, Department of Revenue, NITI Aayog, Ministry of Micro, Small and Medium Enterprises, Department of Science and Technology, Department of Bio-technology, Department  of  Electronics and  Information  Technology, Department of Higher Education and Small Industries Development Board of India to monitor implementation of the Action Plan of Start-up India initiative has been constituted by this Department.

The Committee shall have the following roles:

1.  Review the progress of Action Plan
2.  Evaluate the quality and effectiveness of work done
3.  Strategic and operational planning for implementation of various measures
4.  Ensure that initiatives meet the needs of beneficiaries
5.  Ensure that the initiative is able to demonstrate its impact in full measure
6.  All  measures  taken  comply  with  the  law  and  are  within  the  policy framework.

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## ANNEXURE

## ANNREXURE  REFERRED  TO  IN  REPLY  TO  PART  (b)  OF  THE    LOK  SABHA UNSTARRED QUESTION NO. 1350 FOR ANSWER ON 25.07.2016.

## Key Features of FFS

| Name of Fund     | Fund of Funds for Startups                                                                                                                                                                                                                                                                                                      |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Fund Manager     | Small Industries Development Bank of India (SIDBI)                                                                                                                                                                                                                                                                              |
| Fund size        | Rs. 10,000 crore. The proposed corpus of Rs. 10,000 crore would be built up over the 14 th and 15 th Finance Commission cycles.                                                                                                                                                                                                 |
| Investment Focus | The Fund shall be sector agnostic and ensure support to a broad mix of sectors such as manufacturing agriculture, health, education etc.                                                                                                                                                                                        |
| Purpose          | The FFS shall contribute to the corpus of Alternative Investment Funds (AIFs). AIFs supported under FFS would in turn take up equity in various Start-ups at early stage, seed stage and growth stage (as defined under Startup Action Plan notified on January 16, 2016, as modified by Government of India from time to time) |

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