PM Modi announces Rs 1,000 cr startup fund to push growth of tech ventures

For the next five years India, which is in a technology race with China, has a mission for its startups and unicorns to emerge as global giants and lead in futuristic technologies

Prime Minister Narendra Modi on Saturday launched a Rs 1,000 crore startup seed fund at ‘Prarambh: Startup India International Summit.’ This fund would help to launch and grow new-age ventures.

PM Modi said this fund is one of the initiatives that the country has started so that startups don’t face any capital crunch. Startups are already being helped to raise equity capital through the Fund of Funds scheme. Further, the government will also help startups raise debt capital through guarantees.

“India is trying to create a startup ecosystem which is based on the mantra 'of the youth, by the youth, for the youth'," said Modi. “For the next five years, we have a mission that our startups, unicorns emerge as global giants and lead in futuristic technologies.”

He said if such is the mission of all the countries of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), then a huge population would benefit from it. BIMSTEC is an international organisation of seven nations of South Asia and Southeast Asia, housing 1.5 billion people and having a combined gross domestic product of $3.5 trillion. The BIMSTEC member states include Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand.

“I am happy when I see and hear about the success stories of startups connected with BIMSTEC nations,” said Modi. “I am confident, we can together showcase the power of startups from this region to the whole world.” 

Modi said there is a huge change in terms of how young ventures are perceived. Earlier, on hearing about a startup people used to ask 'why don't you do a job?'. However now people say ‘why not create your own startup’. He said these changes are a major strength of BIMSTEC countries.

He said this is the century of the digital revolution and new-age innovations and this century is also called the century of Asia. And therefore, it is the need of the hour that the future technology emerges from the labs of Asia and entrepreneurs from this region. For this, the countries of Asia will have to come forward and take responsibility, who can work together and for each other and have a sense of cooperation. He said the responsibility falls to the BIMSTEC countries. This is because centuries-old relationships, culture, civilisation, and common heritage of relationships have kept these nations together. 

These collaborations would support startups and be beneficial for all the sector. Sharing the 5-year experience of how young ventures have evolved in the country, Modi said India today is one of the largest startup ecosystems in the world. The country has more than 41,000 startups working on different missions. There are nearly 5,700 startups in the IT sector, 3,600 in the health sector, and 1,700  in the agriculture sector. He said these firms are changing the demographic character of business. In 2014, there were only 4 startups in the unicorn club in the country. But today more than 30 ventures have crossed the $1 billion valuation mark.  “You would be surprised to know that, 11 startups have joined the unicorn club in the year 2020, amid the difficult year of the coronavirus pandemic,” said Modi.

He said the country started the ‘AatmaNirbhar Bharat’ ('self-reliant India) campaign at a difficult time of the pandemic. And the small ventures are also playing a big role in this. “During the pandemic, when the world's big companies were struggling for their survival, a new army of startups was coming up in India,” said Modi.

These firms played a big role in the country, from addressing needs ranging from providing sanitisers, PPE (personal protective equipment) kits to building the supply chain. They catered to the local needs such as delivering kitchen essentials and medicines to the customers, providing transportation to frontline workers, and preparing online study materials for students. “These startups discovered opportunity in disaster and also built confidence amid calamity.”

Today, the success stories of new ventures are not limited to big cities. Many of them come from small cities and towns such as Lucknow, Bhopal, Sonepat, Kochi, and Thiruvanthapuram. He said about 80 per cent of the districts of India have joined the startup movement. Around 45 per cent of startups, today come from tier-2 and tier-3 cities, acting as brand ambassadors for local products.

Also, there is a huge awareness among people related to health and consuming healthy food. He said special growth is being given to the growth of the food and agriculture sectors in India. The country has also created an ‘Agri Infra Fund’ of  Rs 1 lakh crore to modernize the infrastructure related to agriculture. This has opened up new avenues for small companies. Today these firms are collaborating with farmers. Startups are also playing their role in delivering food products from farm to table, with better quality.

He said whenever a new challenge comes in any field, startups come forward and say that they will solve those challenges. India is also working with this startup spirit today.

“Today, the country says that 'we will do it',” said Modi. “Be it digital payments, the solar energy sector, or AI (artificial intelligence) revolution.”

For instance, the transactions on the UPI (unified payments interface) platform amounted to over Rs 4 lakh crore in December 2020. India is moving towards leading the world in the solar sector. According to a recent study, the use of AI in India has also increased very fast compared to the big countries of the world.

Modi also said that small firms are getting the opportunity at par with large businesses in government tenders on the GeM (Government e-Marketplace)  portal.

Till now, nearly 8,000 startups have registered on the GeM portal and carried out business worth about Rs 2,300 crore. He said that the total business through GeM portal is touching nearly Rs 80,000 crore. “In the future, the share of startups in this would increase.”