Startup India Seed Fund Scheme (SISFS)

Startup India Seed Fund Scheme (SISFS)

To build a startup conducive ecosystem the Government of India launched a Startup India Seed Fund Scheme on the 16th of January 2014 to provide opportunities for the growth of the enterprises.

The Startup India Seed Fund Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization. 

On February 5, 2021, the Government of India made an official announcement about the approval of SISFS. It has been approved for a period of four years and was implemented with effect from April 1, 2021. 

Recently, the Government launched the Startup India Seed Fund Scheme (SISFS).

• The Scheme was announced during the ‘Prarambh: StartupIndia International Summit’ which marked the five-year anniversary of the Startup India initiative.

Key Points

• About the Startup India Seed Fund Scheme (SISFS):
  
  • Aim: To provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.
  • Launched by: Department for Promotion of Industry and Internal Trade (DPIIT) with an outlay of Rs. 945 Crore.
  • Some Eligibility Conditions:
    
    • A startup, recognized by DPIIT, was incorporated not more than 2 years ago at the time of application.
    • Startups should not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme.
  • Features:
    
    • It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
    • An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
    • Grants of up to Rs. 5 crores will be provided to the eligible incubators selected by the committee.
    • The selected incubators will provide grants of up to Rs. 20 lakh for validation of proof of concept, prototype development, or product trials to startups.
    • Investments of up to Rs. 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.

• • Expected Benefit:
    
    • It will help in creating a robust startup ecosystem in Tier 2 and 3 regions, as the smaller towns in India are often not provided with appropriate funding.
• About Startup India Initiative:
  
  • It envisages building a robust startup ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs. It was launched in 2016.
  • The action plan of this initiative focuses on the following three areas:
    
    • Simplification and Handholding.
    • Funding Support and Incentives.
    • Industry-Academia Partnership and Incubation.
• Related Government Initiatives:
  
  • Startup Innovation Challenges: It is a fantastic opportunity for any startup to leverage their networking and fund-raising efforts.
  • National Startup Awards: It seeks to recognize and reward outstanding startups and ecosystem enablers that are contributing to economic dynamism by spurring innovation and injecting competition.
  • Ranking of States on Support to Startup Ecosystems: It is an evolved evaluation tool aimed to strengthen the support of States and UTs to holistically build their startup ecosystems.
  • SCO Startup Forum: The first-ever Shanghai Cooperation Organisation (SCO) Startup Forum was launched in October 2020 to develop and improve startup ecosystems collectively.
  • Prarambh: The ‘Prarambh’ Summit aims to provide a platform for startups and young minds from around the world to come up with new ideas, innovations, and inventions.