In a bid to extend funding support for start-ups, the union cabinet on Wednesday approved the establishment of Fund of Funds for Startups (FFS) at Small Industries Development Bank of India (SIDBI) for contribution to various Alternative Investment Funds (AIF).
"The union cabinet has approved the establishment of Fund of Funds for Startups at Small Industries Development Bank of India for contribution to various Alternative Investment Funds, registered with Securities and Exchange Board of India (Sebi), which would extend funding support to start-ups," a statement said.
The government provided Rs 500 crore to the corpus in 2015-16 and Rs.600 crore was earmarked in the 2016-17. Department of Industrial Policy and Promotion (DIPP) will monitor and review performance in line with the Start up India Action Plan while SIDBI will manage day to day operations of FFS.
"The fund is expected to generate employment for 18 lakh people on full deployment, a statement said.
A corpus of Rs 10,000 crore could potentially be the nucleus for catalysing Rs 60,000 crore of equity investment and twice as much debt investment, it said.
The government unveiled Start up India Action Plan unveiled in January 2016.