India is one of the budding hubs of start-up ecosystems in the world. Start-ups like Zomato, Paytm, Groww, Nykaa, MamaEarth, Lenskart and hundreds of others have transformed India and disrupted entire industries within the country. As start-ups are an important engine of economic growth, providing economic transformation, jobs and more, it becomes important for the government to support them.
The Indian government has been floating several initiatives at both national and state-level to support start-ups. Here are some of these initiatives.
SIDBI Fund of Funds is one initiative that helps start-ups secure more capital easily. Under the scheme, banks can contribute funds to the corpus of Venture Funds/ Alternative Investment Funds. As this increases the corpus of VFs and AIFs, there is more money to go around for investment towards various start-ups.
The Start-up India Seed Fund Scheme (SISFS) is another scheme that aims to provide easier access of capital funds to start-ups. The SISFS provides financial support to start-ups for purposes like proof of concept, prototype development, product trials, market entry and commercialisation. This allows those entrepreneurs to access funding at critical junctures during the product-market pipeline.
The Credit Guarantee Scheme for Start-ups (CGSS) allows Scheduled Commercial Banks, Non-Banking Financial Companies (NBFCs) and Securities and Exchange Board of India (SEBI) registered AIFs to get credit guarantees when they are extending loans to start-ups. This minimises the risk factor when it comes to extending borrowing towards start-ups allowing financial institutions to invest more aggressively in the start-up infrastructure.
But funds are not the only factor needed for a start-up’s success. Recognition and credit for innovative start-ups are also important. That’s why the government has set up the National Start-up Awards. The awards aim to “acknowledge start-ups and enablers” who have contributed significantly to the development of India in the start-up space.
There are various state initiatives as well but coordinating efforts across different levels is vital for the efficient use of resources towards supporting start-ups. In order to provide entrepreneurs the necessary insight and information about these initiatives, the Centre has also started the States’ Startup Ranking Framework.
The framework ranked all states and UTs across the categories of institutional support, fostering innovation and entrepreneurship, access to market, incubation support, funding support, mentorship support and capacity building of enablers.
There are several more initiatives floated by government for specific sectors, industries and more. These can help start-ups to enter markets and industries into markets and segments with tough entry barriers.
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(Edited by : Pradeep John)
