Time To Celebrate For Start-ups

A slew of announcements from the finance minister during the budget is a boon for this new economy

- Anagh Pal

With a slowdown in economic growth and job creation, Budget 2020 was expected to make announcements that would boost start-ups and job creation. The finance minister did not disappoint, though some concerns remain, especially with the execution part. Here we will take a look at some of those announcements and what it means for you.

The government has proposed ‘to provide early-stage funding, including a seed fund to support ideation and development of startups.’ “While the ‘seed-fund’ has not been detailed out in the budget, there is a definite need of such risk capital, especially in tough-tech areas, before tech is validated and venture capital funds will typically come in,” says Kunal Upadhyay, CEO, CIIE.CO, IIM Ahmedabad’s Incubator. However, he maintains it is unclear how the seed-fund will be implemented. The hope is that the government will not directly get involved in the investment decisionmaking and work through existing channels like incubators to provide this capital to deserving start-ups.

The government has made significant investments in incubators over the last few years, and they need to be appropriately equipped with capital to help their ventures jump to the next orbit. “The existing seed-fund schemes from Government of India are somewhat obsolete and unless the new scheme is ambitious and aims to back hundreds of ventures every year with up to ₹3 crore per venture, it may not necessarily move the needle and the impact will be limited” he adds.