The Commerce and Industry Minister Piyush Goyal on April 19, 2021, launched the Startup India Seed Fund Scheme. It aims at providing financial assistance to the startups for prototype development, proof of development, market-entry, commercialization, and product trials.

While launching the scheme, the Union Minister stated that the scheme will support the domestic entrepreneurs as well as their business ideas that often are not able to take off because of the absence of critical capital at an early stage.

The Startup India Seed Fund Scheme was earlier announced by PM Modi in January 2021to help budding entrepreneurs and startups in pursuing their innovative ideas.

Objective:

The Startup India Seed Fund Scheme aims at ensuring the adequate availability of funds, especially to the startups with good ideas in various fields.

The scheme will help in securing seed funding, support the transformative ideas, will inspire innovation, and will also facilitate the implementation of the ideas.

As the smaller towns in India are often not provided with appropriate funding, the scheme will help in creating a robust startup ecosystem in Tier 2 and 3 regions.

Startup India Seed Fund Scheme: Key Details

The scheme will be implemented from April 1, 2021. It aims at supporting an estimated 3,600 entrepreneurs through 300 incubators.

Rs. 945 crore will be divided over the next 4 years in order to provide seed funding to the eligible startups. It will be done through eligible incubators across the country.

An Expert Advisory Committee- EAC has been constituted by the Central Government. It will be responsible for the overall monitoring and execution of the government launched scheme.

The Department for Promotion of Industry and Internal Trade is launching the scheme to facilitate startup funding at an early stage.

The incubators will be able to apply for funds through the online portal created by DPIIT.

Grants of up to Rs. 5 crores will be provided to the eligible incubators selected by the Expert Advisory Committee.

The incubators selected by EAC will provide grants of up to Rs. 20 lakh for the validation of the prototype development, proof of concept, or product trials to startups.

Further, under the scheme, up to Rs. 50 lakh will be provided to the startups for commercialization, market-entry, or scaling up through debt-linked instruments or convertible debentures.





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