Direct funding support to startups not envisaged under Startup India Programme

Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.

Direct funding support to startups is not envisaged under the Startup India Programme. Government of India has established a Fund of Funds for Startups (FFS), to meet the funding needs of startups. Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, is the monitoring agency and Small Industries Development Bank of India (SIDBI) is the operating agency for FFS.

As per the operating guidelines issued by DPIIT, FFS contributes to the corpus of SEBI registered Alternative Investment Funds (AIFs). These AIFs, in turn, have to invest at least twice the contribution under FFS in startups, as defined by the Government of India. Each AIF sets up its own Investment Committee and the Investment Committee of each Fund takes a decision on its investment decisions. The AIFs supported under FFS have supported 249 startups as on June 13, 2019.

The investment committee (IC) of each AIF, comprising of investment experts drawn from different domains takes decisions on investing in a particular startup. These decisions are largely a matter of business decisions which depend on a host of factors like uniqueness, innovativeness, intellectual property and business potential.

A formal mechanism has been put in place in the form of Monitoring Committee to review the progress of Startup India programme on a regular basis. The Monitoring Committee comprises representative from DPIIT, NITI Aayog, Department of Revenue (Ministry of Finance), Ministry of Micro, Small and Medium Enterprises, Department of Science and Technology (Ministry of Science and Technology), Department of Bio-Technology (Ministry of Science and Technology), Ministry of Electronics and Information Technology, Department of Higher Education (Ministry of Human Resources Development) and Small Industries Development Bank of India (SIDBI). The Monitoring Committee continuously reviews the progress & implementation of various measures for the growth of the startup ecosystem.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Rajya Sabha today.

(With Inputs from PIB)