To provide additional capital support to entrepreneurs across the country, government will create an equity fund for start-ups which will have a 20 per cent limited stake by it. This was informed by minister of state for information technology (IT) and electronics Rajeev Chandrasekhar on Saturday.
The minister, who was participating in an event hosted by industry body Confederation of Indian Industry (CII), referred to the budget announcement regarding the setting up of the fund by finance minister Nirmala Sitharaman.
"The finance minister has announced that there will be such a fund where the government will be a 20 per cent 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," said Mr Chandrasekhar.
The finance minister 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 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," Mr Chandrasekhar said.