The government has formally unveiled a Startup India Seed Fund Scheme to handhold and financially support early-stage startups across 300 incubation centres.
Union commerce minister Piyush Goyal formally launched the scheme, and this comes almost three months after the Centre announced the plan.
According to the commerce ministry, the fund is expected to benefit around 3,600 startups and boost the startup ecosystem, particularly in tier-2 and 3 cities.
The fund aims to provide financial assistance to startups for proof of concept, prototype development, product trials and market entry.
The minister said that the scheme will “secure seed funding, inspire innovation, support transformative ideas, facilitate implementation and start a startup revolution.”
He said the scheme will create a robust startup ecosystem, particularly in non-metros, “which are often deprived of adequate funding”.
The minister said he would like to encourage innovators from rural areas to come forward and benefit from this scheme.
Grants of up to 5 crore rupees shall be provided to eligible incubators selected by an expert committee, the ministry said.
They shall be offered grants of up to 20 lakh rupees for validation of proof of concept, prototype development or product trials.
Furthermore, investments of up to 50 lakh rupees shall be provided to startups for market entry, commercialisation or scaling up through convertible debentures or debt-linked instruments.
The minister said this scheme is being launched within three months of its announcement by Prime Minister Narendra Modi and underlined that the “times are tough, but our resolve is strong, and never before has it become more important for us to empower our startups.”