The Tamil Nadu government will set up a Rs 250-crore fund for start-ups. The fund will be part of the state's new startup and innovation policy, which was launched, on Saturday, to boost start-up ecosystem in the state.
The new policy was announced three days before the scheduled Global Investors Meet in Chennai on January 23 and 24. The policy aims to create around 5,000 startups, including 10 global high-growth startups, and to create a minimum of 1,00,000 high skilled job creation, direct and indirect, in the startup ecosystem by 2023.
The proposed fund will be managed by a professional financial agency such as SIDBI. It will be registered as an Alternative Investment Fund (AIF) under the SEBI. The state will invest Rs 75 crore in the fund and the first tranche of Rs 25 crore will be allotted in 2019-2020.
Besides, a Tamil Nadu Startup Seed Grant Fund (TNSSGF) of Rs 50 crore, with an allotment of Rs 5 crore in the first year, will be created in partnership with financial institutions and universities for supporting early-stage financing requirements of the startups in the form of grants to fill the gap in fund requirement for research and innovations.
The TNSSGF would also provide funding for Idea-to-PoC (Proof of Concept) stages, which are pre-startup activities. The fund will be managed by the Tamil Nadu Startup and innovaTN Mission (TANSIM) -- which will be governed by a professional Scientific Startup Seed Fund Board.
The policy is presumed to nurture innovation, investment in R&D, infrastructure, knowledge creation, technological development and skilled manpower, resulting in high-growth entrepreneurial ventures across the spectrum of sectors from agriculture, manufacturing, healthcare, education, logistics, social sector, urban development, environment, to Fintech and ICT.
According to the policy document, the state government would provide adequate incentives and resources to startups, facilitators, mentors and investors to promote startup culture in the state. The government would reduce the existing regulatory and tax burden on startups in the field of Labour, Pollution and building norms and base these on self-certification.
The state is also planning to set up startup hubs in Chennai, Coimbatore, Salem-Erode, Madurai, Trichy-Thanjavur, Tirunelveli etc.,
The state has identified five priority actions including creating a conducive ecosystem for encouraging entrepreneurship and innovations, ensuring adequate resources channelled to the startup ecosystem, enabling skill development and inclusive job creation, extending support to social entrepreneurship for a positive social impact and inclusion and establishing global accessibility, connections and partnerships.