The commerce and industry ministry has proposed a USD 310 Mn credit guarantee scheme for startups to help them access funds. At the Startup India Hub launch, in June 2017, DIPP Secretary Ramesh Abhishek has announced that the Union Cabinet is expected to approve the USD 300 Mn fund for startups by the end of July 2017. Commerce and Industry Minister Nirmala Sitharaman, in a written reply to Lok Sabha, said,
“For the scheme, a corpus contribution of ‘Rs 2,000 crore is proposed keeping in mind the challenges faced by startups in accessing funds.”
The proposed scheme will provide a credit guarantee of up to USD 7.7 Mn per case inclusive of a term loan, working capital or any other instrument of assistance. These can be extended by member lending institutions to finance an eligible startup recognized by the DIPP.
Nirmala Sitharaman is also looking to set up a Startup Coast in Karnataka to facilitate entrepreneurs in South India, as part of efforts by the Indian government. The Startup Coast will comprise two innovation centres and up to five incubation hubs in colleges. Apart from this, it will also have a 100-seater workspace in Mangaluru. The project will also entail the installation of 20 to 30 laboratories in schools across the region.
Under the umbrella of ‘Startup India, Stand Up India’ movement, the central and state governments have come up with many schemes like the USD 1.5 Bn “Fund of Funds” scheme, tax exemptions and the inclusion of foreign investment. However, only USD 848 K of the USD 1.5 Bn corpus has been disbursed. Taking this into consideration, government promised to disburse USD 760K as collateral free loans to the startups in March 2017. In June 2017, Nirmala Sitharaman inaugurated the Startup India Online Hub and also announced a startup meet across SAARC nations.