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DPIIT's Startup Expert Committee Includes Saji Gopinath, Renuka Ramnath, Padmaja Ruparel, Anjali Bansal, Sruthi Kannan, Dr Apoorva Ranjan Sharma
The committee members would include representatives from DPIIT; departments of biotechnology, science and technology; Ministry of Electronics and Information Technology; Indian Council of Agricultural Research ; Niti Aayog; and at least three experts nominated by DPIIT Secretary.
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In February of 2021, The Department for Promotion of Industry and Industrial Trade (DPIIT) has notified the promulgation of the Startup India Fund Scheme. This scheme instituted on 21st February 2021 contains operational guidelines to provide financial assistance for proof of concept, prototype development, product trials, etc. and also the constitution of an expert advisory committee. The committee will be responsible for the overall execution and supervision of the Startup India Seed Fund Scheme. The said committee will evaluate select start-up incubators, the incubators will provide them with the required reports on a timely basis.
The committee members included representatives from DPIIT; H.K. Mittal, Chairman; Financial Advisor, DPIIT; departments of biotechnology, science and technology; Ministry of Electronics and Information Technology; Indian Council of Agricultural Research and Niti Aayog. Also, it has included experts members from the Startup ecosystem - Saji Gopinath, IIM Kozhikode; Renuka Ramnath, Indian Private Equity and Venture Capital Association; Padmaja Ruparel, Indian Angel Network; Anjali Bansal, Avaana Capital; Sruthi Kannan, Cisco Launchpad and Dr Apoorva Ranjan Sharma, Venture catalysts.
In a summit organized by DPIIT in the January of 2021, Prime Minister Narendra Modi announced a Rupees 1000 crore seed fund for start-ups at the Prarambh India International Summit. This summit had brought together top-level policymakers, industry leaders, academia, investors, fund managers, startups, and all relevant stakeholders from across the globe. Interestingly, this Summit marks the 5th anniversary of Startup India. The funds can be accessed through select incubators across the country. The startups will be given a guarantee and that will enable them to raise debt from the investors. The funds can be accessed through select incubators across the country, and the startups will be given a guarantee that they can raise debt henceforth. Under this scheme the government will assist for:
• Product trials
• Prototype development
• Proof of concept
• Market entry and commercialization
The government will be “sector agnostic”, that is, all startups will be treated equally. However, there is a requirement that the startup cannot be more than 2 years old as listed under DPIIT and hold commercial viability. It should also be using technology for its core product/service. Some other requirements include, 51% shareholding with Indian promoters, should not have more than 10 lakh in monetary support from the government. Also, the startup can avail of this scheme only once. The startups will be selected based on their application on the StartupIndia portal.
Why does this initiative hold weight?
- Given that this summit was held in partnership with BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) countries, it will add weight to India’s Foreign Policy. From the economic angle, this implies increased trade, increased FDI, as well as increased connectivity for the otherwise secluded North East enabling better infrastructure.
- Given that a large number of youths are engaged in the start-up sector, this central government incentives initiative will also facilitate job creation in an otherwise job deficient economy. The pandemic had brought about the uncertainty of job, education, and entrepreneurship. But, this scheme could be a silver lining in an otherwise prevailing gloomy atmosphere due to continued COVID 19 adverse impact.
- Given that this mega-event attracted over 200 marquee speakers, it was an opportunity for new players to attract domestic as well as international investment. Networking of this scale will act as a multiplier force for the start-up bandwidth of India.
- It will also send a message to the international investors and have greater trust about the Ease of Doing Business in India.
- India is already known for its scientific and technological prowess. Events and investments of this magnitude will enable more and more start-ups to exhibit their novel ideas, innovations, and platform for the development of innovative local products.
- Given the guarantee provided by the government, it will be easier for start-ups to avail loans from banks and other financial institutions.
- It will enable the financial inclusion of women, who not only constitute half of humanity but are essential to the economy of every country.
- The seed funding can be used only for the purpose it is designated, and not for creating any facilities. This enables a focus on product development.
It can gauge the size of startups in India by looking at data upfront. For instance, as per the #Startupindia website under the Ministry of Commerce, India has 50,000 start-ups, expected to witness year-on-year growth of 12-15%. They have enabled the Indian economy to survive in the pandemic era and have been a crucial driving force in realizing the vision of Atmanirbhar Bharat. As per #startupindia under the Ministry of Commerce, India has 50,000 start-ups, expected to witness year on year growth of 12-15%. Given the huge potential of startups, it is only fair that the government should begin with the seeding investment of this magnitude.
It should be acknowledged that all startups do not attain commercial success. The rate of failure of the startups is high and that is a fact that we accept as real-life empirical evidence across the world. The funds who invest in startups experience a high level of risk but at the same time, the successful ones bring huge dividends to the entrepreneurs and the investors. The investors gain due to market valuations and some of the startups go on to become Unicorn in a short number of years.
A large number of unskilled youth will also need to be taught and learn soft skills. The startups would have a challenge in hiring the right talent, partnerships, striking the right deal, marketing and eventually branding their products and solutions. All of these skills require the right mentorship and guidance. Govt has initiatives like Startup India, and this can act as a role model. At the same time, we do recognize that a lot is left to be accomplished as for the size of India, we would need dozens of such schemes to be implemented across the country.