Fund of Funds Scheme (FFS) for Startups
The Indian government's commerce and industry ministry plans to allocate a significant portion of the second Rs 10,000 crore Fund of Funds Scheme (FFS) to support emerging entrepreneurs, particularly in sectors like new-age technology, artificial intelligence, and machine building.
Background and Purpose
- The new FFS was announced in the national budget with a total corpus of Rs 10,000 crore.
- A similar scheme was launched in 2016 with the aim of catalysing venture capital investments.
Operational Details
- The Small Industries Development Bank of India (SIDBI) is responsible for operationalizing the scheme.
- SIDBI provides capital to SEBI-registered Alternative Investment Funds (AIFs), which then invest in startups.
- The second FFS is expected to be managed by SIDBI as well.
Startup India Initiative
The government launched the Startup India initiative on January 16, 2016, with the goal of building a strong ecosystem to nurture innovation and promote startups in the country.
Eligibility and Benefits
- Entities are recognized as 'startups' under the Startup India initiative by the government department in charge.
- To date, over 1,50,000 entities across more than 55 industries have been recognized as startups.
- These recognized startups are eligible for both tax incentives and non-tax incentives under the Startup India action plan.
