To give a boost to startups in the priority sector, the Department for Promotion of Industry and Internal Trade (DPIIT) plans to set up an India Startup Fund with a corpus of Rs 1,000 crore. The fund will focus on rural healthcare, water and waste management, clean energy solutions, cyber security and drones.
The aim is to offer seed funds for high-tech, cutting edge startups. Initially, the plan is to provide seed funds to 5,000 startups in priority areas, a senior government official was quoted as saying in a report in ET.
Other upcoming areas such as Internet of Things (IoT) and artificial intelligence could also be covered under the proposed fund at a later stage.
DPIIT has lined up a slew of measures aimed at strengthening the startup ecosystem in the country, which are likely to be announced once the new government is in place at the Center.
The department has also prepared ‘Startup India Vision 2024’ document that aims for an ambitious target of helping 50,000 new startups in the country and creating 20 lakh direct and indirect employment opportunities.
Regulatory changes are also on the anvil aimed at promoting venture capital and angel investments, especially from Indian investors. The proposal is to have separate carve-outs for startups in all the laws of the country wherever required.
Besides relaxation in angel tax, a proposal is also being worked upon to clearly define accredited investors. Funds inflow in startups by these Investors may be exempted from angel tax subject to complying with certain net worth criteria.