Two years after the government launched a scheme to support startups in the country, only 75 start-ups have been funded, says government's own data. According to a reply given by commerce and industry minister Suresh Prabhu in Rajya Sabha, these start-ups have been given Rs 337.02 crore, out of a Rs 10,000 crore fund of funds.
A fund of funds invests in other funds who later on invest in companies. The FoF does not directly invest in a company.
While a total of 5,350 Startups have been recognised by Department of Industrial Policy and Promotion (DIPP) for availing benefits under Startup India initiative, only 74 start-ups have been able to avail tax exemption, while 975 applicants have received benefits under the Startups Intellectual Property Protection (SIPP) scheme.
The SIPP scheme was designed to promote awareness and adoption of Intellectual Property Rights amongst startups. The scheme helps nurture and mentor innovative and emerging technologies and assist them in protecting and commercialising it by providing them with access to intellectual property services and resources.
Experts believe that while the number of investments made by government is a bit below expectations, it is not alarming. “One has to also understand that in these two years, there are other sources of funding, too, that start-ups must have availed of. Not everyone qualifies for the funding, neither is every start-up inclined to get that funding," says Priyank Narayan, director, Entrepreneurship programmes at Ashoka University.
While the scheme was modified last year, he feels that government should involve more private sector incubators and accelerators in the process. Also, the time taken from application to finally getting selected needs to be cut down.
"Pace of disbursement is not much of a worry. I believe the government has done ground work and now they should be scaling up," says Benaifer Malandkar, Chief Investment Officer at RAAY investments, the family office of Amit Patni.
DIPP has spent Rs 2.7 crore in FY 2015-16 , Rs 4.8 crore in FY 2016-17 and Rs 13.2 crore in 2017-18 on the start-up India scheme. Under DIPP recognised 5,350 Startups, at least 40,000 people have been employed.
