Govt to Allocate Majority of ₹10,000 Cr Startup Fund to AI, Tech Sectors: Official

An official stated that the Ministry of Commerce and Industry will allocate a significant portion of the second ₹10,000 crore Fund of Funds Scheme (FFS) for startups to emerging entrepreneurs in sectors like new-age technology, artificial intelligence, and machine building.

In the Budget, the government unveiled a new Fund of Funds Scheme (FFS) with a corpus of ₹10,000 crore. A similar scheme was also launched by the government in 2016.

The official stated, "A significant portion of this ₹10,000 crore Fund of Funds will be dedicated to new-age technology, AI, and machine building."

The 2016 scheme was designed to stimulate venture capital investments and was implemented by the Small Industries Development Bank of India (SIDBI). SIDBI provides capital to Securities and Exchange Board of India (SEBI)-registered Alternative Investment Funds (AIFs), which, in turn, invest in startups.

The official added that SIDBI is also expected to manage the second scheme.

To foster a robust ecosystem for nurturing innovation and promoting startups, the government launched the Startup India initiative on January 16, 2016.

Under the government's eligibility criteria, entities are recognized as 'startups' through the Startup India initiative by the department. To date, over 1,50,000 entities have been recognized as startups across more than 55 industries.

These units are eligible to receive both tax and non-tax incentives under the Startup India action plan.