DPIIT Set to Increase Funding for Startup India Seed Fund Scheme

The Department for Promotion of Industry and Internal Trade (DPIIT) in India is set to increase the Startup India Seed Fund Scheme (SISFS) funding corpus as it seeks to speed up the pace of funding to incubators supporting early-stage companies across the country. The scheme was launched in April 2021 and is set to run until March 2025, with a corpus of INR 945 crore. Of this amount, INR 611 crore has been allocated to incubators, with INR 61 crore released to startups under the seed funding scheme. The government aims to support 3,600 entrepreneurs through 300 incubators over the four-year period of the scheme.

“We are trying to increase the pace of the scheme by 20% and formalise the proposal for higher funding in the next 5-6 months,” joint secretary in the department, Manmeet K Nanda told reporters.

Scheme supports entrepreneurs across sectors

The scheme is sector-agnostic, providing grants of up to INR 20 lakh and debt funding of up to INR 70 lakh to individual startups. Incubators earn a 5% management fee. Currently, 160 incubators across 25 states and union territories have been selected to run the scheme, supporting 1,030 startups. The healthcare and life sciences sector has the highest number of startups backed by the fund, with Maharashtra having the most supported startups among Indian states. The fund provides financial assistance for proof of concept, prototype development, product trials, market-entry, and commercialization.

Impact assessment underway

The DPIIT is conducting a third-party assessment of the Startup India Seed Fund Scheme to assess its impact on the ground. The National Institute of Financial Management (NIFM) is independently reviewing how the scheme has benefited startups and incubators. The assessment will evaluate the performance of the startups, incubators and the funding's impact on greater opportunities. The assessment will also provide feedback on how the DPIIT can improve its work. About 98,000 startups have been registered with DPIIT, and the assessment is expected to provide valuable insights into the scheme's effectiveness in supporting entrepreneurs across India. 

“A third-party impact assessment of the Startup India Seed Fund Scheme is underway. It is being done by the National Institute of Financial Management (NIFM). They will independently review how the scheme is actually benefited,” Nanda said. “NIFM will evaluate the performance of the startups, and incubators and see how this funding… led to greater opportunities and will also give us feedback on how we can improve our work,” she said, adding that about 98,000 startups have been registered with DPIIT.