The government will create a new equity fund for start-ups with a 20 percent limited stake to provide additional capital support to the entrepreneurs, and the corpus will be managed by private fund managers, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Saturday. The announcement in this regard has already been made by Finance Minister Nirmala Sitharaman, he said.
"The finance minister has announced that there will be such a fund where the government will be a 20 percent limited partner and it will be managed by private fund managers.
"There will be a fund that will be created and sponsored by the government of course but it will be managed like any other private fund. That will create required private equity capital as an addition to what exists today," Chandrasekhar said at an event conducted by the Confederation of Indian Industry (CII).
Sitharaman had announced the creation of government-backed funds to encourage important sunrise sectors, such as climate action, deep-tech, digital economy, pharma and agri-tech. The government has already put in place some of the funds like the Startup India Seed Fund Scheme (SISFS) with an outlay of Rs 945 crore to help start-ups in meeting their capital requirement.
Some states, including Karnataka, Uttar Pradesh, Bihar, Gujarat and Rajasthan, have put in place funds to support start-ups. "It's a great time to be an entrepreneur. It is a great time to be a start-up.
"It is an absolute mission and article of faith for our Prime Minister (Narendra Modi) and our government that the expansion of the start-up ecosystem, funding it, fuelling it, and creating innovations in the start-up ecosystem…are out there in a post-COVID-19 world in a manner where intellectual properties are created," Chandrasekhar said.