Cabinet sanctions Rs 10,000 crore for startups
The government has already funded Rs 500 crore in 2015-16 and Rs 600 crore will be provided in 2016-17.
To provide a push to Startup India Action Plan, on Wednesday the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the establishment of "Fund of Funds for Startups" at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF) to fund startups, said a Press Information Bureau release.
The corpus of FFS will be of Rs 10,000 crore will be built up over the 14th and 15th Finance Commission cycles. The government has already funded Rs 500 crore in 2015-16 and Rs 600 crore will be provided in 2016-17.
As per the release, the fund is expected to generate employment for 18 lakh people on full deployment.
"A corpus of Rs. 10,000 crore could potentially be the nucleus for catalyzing Rs. 60,000 crore of equity investment and twice as much debt investment. This would provide a stable and predictable source of funding for Startup enterprises and thereby facilitate large scale job creation", said the release.
Why Fund of Funds for Startups?
As per the release, as startups face challenges to get initial funding, a dedicated fund for carrying out Fund of Funds operations will enable flow of assistance to "innovative Startups through their journey to becoming full fledged business entities".
The SIDBI experts manages the day to day operations of FFS. This Fund is expected to encourage greater private capital and thus help leverage mobilization of larger resources.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
10:05 PM IST