'Govt gave Rs 1587 Cr to startups, will make favourable changes in policy'

In order to encourage entrepreneurship in the country, the government has provided Rs 1587 Cr in fund to startups since the launch of Startup India programme in India said Department of Industrial Policy and Promotion Secretary Ramesh Abhishek.

"We have been able to help more than 14,000 startups in various ways. Almost 4,700 startups have been recognised by DIPP, giving them a host of services, incentives, and facilities. We have been able to provide $242.7 Mn (INR 1,587 Cr) in funding to startups," said Abhishek in an interview to Inc42.

This has been through Fund of Funds and all the various schemes by the Department of Biotechnology, Department of Science and Technology as well as Ministry of Human Resource. The govt is also trying to make legal changes to help startups and investors.

"We are looking at a lot of favourable regulatory and legal changes that will make funds available to startups," said Abhishek.

Talking about funding, he said it is a big issue for start. For that, it is trying to see how angel investor networks can also avail the advantage of Section 56 of the Income Tax Act. Currently, money invested by angel investors, one-third of that goes as tax for the investee company.

"We are trying to make it easier and hopefully, there will be a change in regulation that will protect the investment", added DIPP secretary. Former IAS officer also said govt is making an effort to connect startups with people in the government, public sector, and private sector.

On central government steps to help the state governments formulate startup policies, he said that through govt efforts and the initiatives of the states, now 16 states out of 29 have their own startup policies. DIPP plans to roll out State Startup Ranking Index by end of this year.

Govt last year while launching startup India programme had instituted a Rs 10,000 crore fund-of-funds. It also promised to build a startup culture in the country. Recently, Startup India Hub, which was launched by Nirmala Sitharaman, allowed startups to apply for government schemes and venture funds directly from its platform.

However, according to data from Tracxn, the number of new internet and technology start-ups launched in the first nine months of this year has slumped to 800 from more than 6,000 in the last year.