26.9 C
Thursday, October 5, 2023

Creative business ideas take off with Startup India Seed Fund Scheme

- Advertisement -

Startup India is the Government of India’s flagship program aimed at catalyzing startup culture and creating a robust and inclusive environment for innovation and entrepreneurship in the country in order to propel it to the next stage of economic growth.However, financial aid to entrepreneurs in the early stages has always been a tough subject, stifling many great ideas before they take flight.

The startup ecosystem in India is mostly hampered by a lack of finance throughout the seed and ‘Proof of Concept’ development stages. The funding necessary at this point is typically make or break for entrepreneurs with solid business concepts.

This is why many new company concepts fail owing to a lack of necessary cash at an early stage for proof of concept, prototype development, product testing, market entrance, and commercialization. Seed funding for such promising situations can have a multiplier effect in the validation of numerous entrepreneurs’ business concepts, resulting in job creation.

Startups can obtain funding from angel investors and venture capital companies only once they have produced proof of concept. Similarly, banks only lend to applicants who have collateral. It is critical to offer initial capital to firms with unique ideas in order for them to execute proof of concept experiments.

Taking into consideration all of the concerns of startups, the Government of India is now aggressively implementing the Startup India Seed Fund Scheme (SISFS).

Under this ambitious initiative, the government will provide financial assistance to startups through approved incubators for proof of concept, prototype development, product trials, market entry, and commercialization.  But, there is no project-based financing available, under the initiative.

The SISFS has been sanctioned for Rs. 945 crore during a four-year term beginning in 2021-22. As of December 10, 2021, 48 incubators had been authorized for Rs.192.25 crore in financial support for delivering onward seed funds to selected entrepreneurs.

So far, 115 firms have been chosen by incubators under the initiative. It intends to assist an estimated 3,600 businesses through 300 incubators during the next four years. 

As of July 30, 2022, Rs. 375.25 crore of the Rs. 945 crore fund had been approved to 102 incubators under the Startup India Seed Fund Scheme (SISFS). In addition, 378 DPIIT-recognized businesses have been accepted for a total of Rs. 81.45 crore by the scheme’s approved incubators.

Particularly from the north eastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura, two incubators, one each from Sikkim and Assam, have been awarded a total of Rs. 5 crore under the plan as to 30th July 2022. In addition, 9 DPIIT-recognized businesses from the north eastern states have been accepted for a total of Rs. 1.15 crore by the scheme’s designated incubators. The Startup India Seed Fund Scheme (SISFS) will be introduced by the government on April 1, 2021.

It offers financial assistance to eligible Department for Promotion of Industry and Internal Trade (DPIIT)-recognized startups, allowing them to advance to the point where they can raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions. SISFS funds are distributed to qualified entrepreneurs through qualified incubators across India.

Since its inception on January 16, 2016, the Startup India initiative has undertaken several activities with the purpose of aiding entrepreneurs, developing a healthy startup environment, and transforming India into a country of job creators rather than job seekers. 

These initiatives are overseen by the Startup India Team, which reports to the Department of Industrial Policy and Promotion (DPIIT).

Related Articles

Latest Articles