The commerce and industry ministry of India has proposed Rs 2000 crore credit guarantee scheme for startups to help them get access to funds, according to a report in MoneyControl.
“For the scheme, a corpus contribution of Rs 2,000 crore is proposed keeping in mind the challenges faced by startups in accessing funds,” Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.
Nirmala Sitharaman said that the proposed scheme will provide credit guarantee of up to Rs 500 lakh per case and this will be inclusive of term loan, working capital or any other instrument of assistance extended by member lending institutions. The idea is to finance eligible startups recognized by the Department of Industrial Policy and Promotion (DIPP).
Earlier in June 2017, DIPP Secretary Ramesh Abhishek announced at the launch of the Startup India Hub that the Union Cabinet is expected to approve the Rs 2,000 crore fund for startups by the end of July 2017.
Several perks are being offered by central and state governments to startups under the of ‘Startup India, Stand Up India’ initiative. These include the $1.5 billion fund of funds, tax exemptions and the inclusion of foreign investment.
Moreover, Niti Aayog CEO Amitabh Kant said on Tuesday that the government has scrapped around 1200 laws and procedures to make registrations easier for startups and encourage entrepreneurs.
However, according to an Inc42 report, only Rs 5.66 crore of the Rs 10,000 crore corpus of the fund of funds has actually been disbursed till date.