As many as 81 start-ups in Odisha have sought a relief package from Chief Minister Naveen Patnaik, saying in a letter they need monthly funding to survive as India is shuttered for three weeks to prevent the spread of the coronavirus..
The companies have sought assistance ranging from Rs 15,000 to Rs 50,000 for six months, saying the funding can be driven by the dates in which they were registered. The package may be made available to those start-ups that have not availed any pecuniary incentive from the state government barring rental subsidy. For those start-ups that are already receiving financial incentive from the state government, their incentive could be doubled or the duration be extended. The financial dole from the government is expected to help the start-ups to meet their operative expenses.
Since funding is one of the key impediments for start-ups to establish business and ramp up, the entities have requested the state government to act as guarantor for soft loans or facilitate collateral-free loans. The ceiling on loan for any start-up company registered before April 1, 2019 and is presently in the growth stage is envisaged at Rs 15 lakh to be serviced in three to four years.
As an alternative to soft loans, the start-up community has suggested a government backed credit guarantee mechanism at any nationalised bank with a special relief interest rate for at least three years.
Other demands listed include speeding up the process of approval for any pending application soliciting financial assistance, release of payments towards subsidy or any pending payments of a government department and priority preference for Odisha-based start-up in any government project.
The start-up community has recommended the setting up of a single window or exclusive point of contact to address the demand for the relief package and spell out timelines for different stages of approval and documentation to enable faster processing and ease of documentation.
Odisha’s start-up ecosystem has 595 registered entities spread across an array of sectors- e commerce, agri business, art & culture, IT enabled services (ITes), jewellery, IT products and healthcare to name just a few.
“The COVID-19 pandemic has put a serious dent in the start-up ecosystem in Odisha and many of them may have to shut shop and the impact will be devastating for all the stakeholders. We have come together and have deliberated on the topic and have come up with a proposal for your kind consideration and necessary action”, the letter to the Chief Minister read.