One of the most welcoming aspects of the budget which the start-up segment found was the government’s announcement to double the corpus for the Fund of Funds for Startups (FFS) Scheme, injecting an additional Rs 10,000 crore on top of the existing contribution of Rs 10,000 crore. Stakeholders in the segment say this move will significantly give the much-needed financial boost to the entrepreneurial spirit in the country and also motivate them to steer their start-ups towards their growth journeys.
The government’s move to double the corpus for the Fund of Funds for Startups (FFS) Scheme reaffirms the government’s commitment to fostering innovation and supporting India's startup ecosystem. Launched in 2016, the FFS scheme was designed to provide crucial financial support to startups by enabling access to domestic capital. The infusion of fresh funds will play a vital role in addressing early-stage funding challenges, allowing emerging businesses to scale and thrive.
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“Initial funding is often a critical factor in a startup’s success, helping them establish operations, expand their reach, and drive innovation. We believe this expanded fund will be particularly beneficial for PropTech startups, especially in the high-demand co-living space, which presents immense growth potential. By strengthening financial support for startups, the government is paving the way for greater entrepreneurship, job creation, and long-term economic growth,” said Abhishek Tripathi, Founder of Settl., a managed co-living startup.
Such a move is also expected to benefit emerging industries such as PropTech, FinTech, HealthTech, and Green Energy, where substantial investments are required to develop and implement cutting-edge solutions. A robust startup ecosystem, backed by strong financial support, will further strengthen India's position as a global hub for entrepreneurship and innovation.
Another interesting aspect of the Union Budget 2025-26 brings a welcome boost for India's startup ecosystem, particularly in improving access to credit and fostering growth. The increase in the credit guarantee cover for startups to ₹20 crore, with a moderated guarantee fee. “This will significantly enhance funding opportunities for emerging businesses in critical sectors. The announcement of establishing a new Fund of Funds underscores the government's commitment to nurturing innovation and scaling high-potential ventures. Extending tax benefits under Section 80-IAC for startups incorporated until 2030 is another encouraging step, providing much-needed financial relief and incentivizing entrepreneurship. The increased emphasis on Fintech solutions to enable Startups and MSMEs to access financial services will further facilitate the ease of doing business in the country,” observed Manish Aggarwal, CEO and Founder, FINQY.
