Piyush Goyal, the Commerce and Industry Minister, on 19th April, 2021, launched the Startup India Seed Fund Scheme. The newly launched scheme has a central focus on giving assistance to grassroot level entrepreneurs and their ideas which can’t take off due to unavailability of capital at an early stage. The scheme will ensure financial assistance to the startups for prototype development, proof of development, market-entry, commercialization, and product trials.
The government of India for this scheme rolled out ₹945 crore to support around 3600 startups and 300 incubators. It has also been approved for the period of next four years effective from April 1, 2021.
On the occasion, Piyush Goyal stated that often good ideas are bought out by international venture capitalists at throwaway prices. “I hope good ideas don’t get sold very cheap, particularly to foreign investors, who are able to identify a good idea… I hope this scheme supports our domestic entrepreneurs and their business ideas who often cannot take off due to the absence of critical funding at an early stage,” he added.
To look over, monitor and assure the smooth execution of the scheme, an expert advisory committee has been set up by the Department for Promotion of Industry and Internal Trade (DPIIT). According to the guidelines, ₹ 5 crore will be provided to the eligible incubators selected by the committee. The selected incubators will provide grants of up to ₹ 20 lakh for validation of proof of concept, or prototype development, or product trials to startups. Investments of up to ₹ 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
“The Seed Fund Scheme also envisions to promote virtual incubation for startups by enabling 300 incubators to support startups from all corners of the country. The impact of this will be visible by the spur of innovations in tier 2 and tier 3 regions of India,” an official statement said.
The minister further said that the scheme will create a robust startup ecosystem. “Would like to especially encourage innovators from rural areas to come forward and benefit from this scheme,” he said.