Budget 2019: Centre expected to enhance start-up fund to Rs 20,000 cr

In a bid to rev up the economy, the government might enhance the Start-Up fund in the Budget 2019-20. According to highly-placed sources, the government is likely to come good on its poll promise of enhancing the fund to Rs 20,000 crore.

The Start-up India programme had created the `Fund of Funds for Startups (FFS)` with a corpus of Rs 10,000 crore to provide support for Start-ups, over a period of XIV and XV Finance commission cycles.

The Fund was set up with the approval of Union Cabinet in June 2016 and is managed by Small Industries Bank of India (SIDBI) and contributes to the corpus of Alternate Investment funds (AIFs) for investing in equity and equity linked instruments of various start-ups.

Even the Economic Survey which was presented on Thursday highligthed the importance of the segment. It recommended that the government rationalise the tax policy and its implementation for start-ups to foster innovative investments in the Indian economy.

"Several studies have also suggested that capital gains tax can have significant economic consequences for individual investors in terms of its lock-in effects and associated deterring incentives to use capital gains into riskier investments," the survey said.