The Central government has proposed to introduce a slew of reforms and another fund to boost startups that are focussed on priority areas. The priority areas include-- rural healthcare, water and waste management, clean energy solutions, cyber security and drones.
The Department for Promotion of Industry and Internal Trade (DPIIT) plans to set up an India Startup Fund with an initial amount of Rs 1,000 crore. The government wants to offer seed funds for high-tech, cutting edge startups.
The proposal is to provide seed funds to 5,000 startups in priority areas. The dedicated fund, proposed in the department’s 100 day Action Plan, is separate from the Fund of Funds for Startups (FFS), which was set up in 2016 under the Small Industries Development Bank of India.
The Rs 10,000 crore fund of funds makes downstream investments in venture capital and alternative investment funds that in turn invest in startups. Startups focussed on other technologies like Internet of Things (IoT) and artificial intelligence (AI) will also be included gradually.
To boost startups, DPIIT has recommended regulatory changes aimed at promoting venture capital and angel investments, especially from Indian investors. Until now, the department has recognised as many as 17,984 startups.
Apart from this, the government has pitched to treat outsourced R&D efforts on par with in-house R&D for incentivisation purposes and easier movement of researchers between academia, public research institutions, entrepreneurship and industry.