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UP proposes Rs 100 crore corpus for start-ups

Draft start-up policy awaits state cabinet nod

Virendra Singh Rawat  |  Lucknow 

Start-up, restart

Joining the Startup India bandwagon, Uttar Pradesh has finalised its own start-up policy to promote the 'start-up culture' and entrepreneurship in the state.

UP Information Technology & Start-up policy 2016 is aimed at facilitating both small and large IT/ ITeS industry spanning start-ups and micro, small, and medium enterprises by providing incentives and a conducive policy framework.

The draft of the policy is ready and would now be placed before the state cabinet for approval.

States like Tamil Nadu, Rajasthan, Karnataka, Kerala, Chhattisgarh etc have already laid out their respective start-up policies or are in the process of hitting the trail soon to promote their bunch of budding entrepreneurs.

Under the proposed policy, UP would promote start-ups through the INFUSE model (Incubators-Fund of Funds-Start-up entrepreneurs), wherein it would provide financial support to incubators, start-ups and venture capitalists.

The government would create an initial corpus (seed fund) of Rs 100 crore to promote incubators and mobilise start-ups. The seed fund could also be increased depending upon the requirement and scalability.

However, the funds would not be invested directly into a start-up, but injected in Sebi-approved venture capital (VC) funds. For UP-based start-ups, the state government would match 25% of the money invested by the VC.

The corpus would be professionally managed like a private equity (PE)/venture fund and a permanent fund manager would be appointed to manage the funds granted by the government, the policy draft reads.

The policy has trifurcated UP in three tiers, wherein Tier I includes Noida and Greater Noida. Tier II comprises Lucknow, Agra, Kanpur, Allahabad, Meerut, Varanasi and other cities having population of over 2 million, including the Agra-Greater Noida Yamuna Expressway region. Tier III includes cities having population of less than 2 million.

A state level Empowered Committee under the chairmanship of the chief secretary would monitor the implementation of the policy. It would also comprise senior bureaucrats and principal secretaries of the departments of IT, finance, planning, small industries, commercial tax, energy, transport, revenue, housing etc.

The government also proposes to promote establishment of new incubators. In the first phase, the government would encourage government/semi-government institutions like IITs, IIMs etc to set up incubators/accelerators to build the start-up ecosystem.

Of late, the incumbent Akhilesh Yadav government has been trying to boost economic activity in the state for speedy job creation and economic development.

The government has announced fresh policies in all the major sectors spanning agriculture, industry, solar power, rooftop solar power plant, dairy etc to attract private investment and improve the ease of doing business environment in the state.

It has been organising investors' conclaves and roping in non-resident Indians (NRI) to promote 'Brand UP' and attract investment.

In a recent pan-India survey on 'Ease of Doing Business' conducted by the World Bank Group in consort with KPMG and CII, UP had stood tenth in the tally, which was topped by Gujarat and followed by Andhra Pradesh and Jharkhand.

Odisha and Karnataka, which had secured the seventh and ninth position respectively, were the only non-BJP-ally ruled states to figure in the top 10 states, which assessed them on eight reform parameters viz. setting up business, land allotment, construction permit, labour reforms, environmental clearances procedure etc.

With UP polls due early next year, the Akhilesh dispensation is on an overdrive to complete development projects underway.

First Published: Mon, February 01 2016. 17:14 IST