Why in News?
Recently, Minister of Railways, Commerce & Industry,
Consumer Affairs and Food & Public Distribution launched the
Startup India Seed Fund Scheme (SISFS).
Launched On: 19th April, 2021
Time Period: For the period of next 4 Years starting
from 2021-22.
Aim:
To provide financial assistance to
startups for proof of concept, prototype development, product trials, market
entry, and commercialization.
NEED:
- Easy availability of capital
is essential for entrepreneurs at the early stages of growth of an enterprise. - Funding from angel investors
and venture capital firms becomes available to startups only after the proof of
concept has been provided. Similarly, banks provide loans only to asset-backed
applicants. - It is essential to provide
seed funding to startups with an innovative idea to conduct proof of concept
trials.
Objectives:
- Startup
India Seed Fund Scheme (SISFS) aims to provide financial assistance to startups
for proof of concept, prototype development, product trials, market entry and
commercialization. - This
would enable these startups to graduate to a level where they will be able to
raise investments from angel investors or venture capitalists or seek loans
from commercial banks or financial institutions.
Features:
- It
will be implemented with effect from 1st April 2021 and Rs. 945 crores
corpus will be divided over the next 4 Years (2021-25) for providing seed funding
to eligible incubators across India. - The scheme
is sector-agnostic & will support startups across all sectors. - It will
be implemented by the Department for Promotion of Industry & Internal Trade,
Ministry of Commerce & Industry.
How
Startup India Seed Fund Will Operate?
The
Seed Fund will be disbursed to eligible startups through eligible incubators
across India by DPIIT (Department for Promotion of Industry and Internal Trade).
It is Nodal Department of Seed Fund.
Eligibility
Criteria:
💠A startup, recognized by DPIIT, incorporated
not more than 2 years ago at the time of application.
To
get DPIIT-recognized, please visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html
💠The startup must have a business idea to develop a product or a service with a
market fit, viable commercialization, and scope of scaling.
💠The startup should be using technology in its core product or service, or business
model, or distribution model, or methodology to solve the problem being
targeted.
💠Preference would be given to startups creating innovative solutions in sectors such as
social impact, waste management, water management, financial inclusion,
education, agriculture, food processing, biotechnology, healthcare, energy,
mobility, defence, space, railways, oil and gas, textiles, etc.
💠Startup should not have received more than Rs 10 lakh of monetary support under any
other Central or State Government scheme. This does not include prize money
from competitions and grand challenges, subsidized working space, founder
monthly allowance, access to labs, or access to prototyping facility.
💠Shareholding by Indian promoters in the startup should be at least 51% at the time of
application to the incubator for the scheme, as per Companies Act, 2013 and
SEBI (ICDR) Regulations, 2018.
💠A startup applicant can avail seed support in the form of grant and
debt/convertible debentures each once as per the guidelines of the scheme.
Source: PIB