Finance Minister Nirmala Sitharaman, on Saturday, February 1, in the Union Budget 2025, announced that the Government of India would establish a fresh Fund of Funds (FoFs) with a capital of Rs 10,000 crore. This project is an extension of the government’s continuous efforts to promote innovation and entrepreneurship in India and seeks to provide financial assistance for startups in a variety of industries. Moreover, the FoFs will give a major boost to the Government of Indiaās Startup India initiative.
Key Highlights of the Announcement
A fresh Fund of Funds: The government will set up a fresh Rs 10,000 crore FoFs, which will boost the existing commitments of Rs 91,000 crore already received by the previous fund. This new fund is expected to have an expanded scope, allowing for broader investments in startups.
Support for Diverse Sectors: The FoFs operate by investing in other venture capital or private equity funds rather than directly in startups. This strategy helps diversify risk and facilitates capital flow to a wider range of startups.
Implications for Startups In India
This new Fund of Funds’ establishment is expected to have a big influence on India’s startup ecosystem by:
- Improving early startups and growth-stage firms’ access to funding.
- Lowering dependence on outside finance and promoting domestic venture capital investments.
- Promoting innovation in an array of sectors by offering funding specifically designed for emerging sectors and industries.
Overall, these measures demonstrate the government’s deliberate emphasis on fostering a thriving startup scene that can propel India’s economic expansion and employment creation.
Startup India Initiative
On January 16, 2016, Startup India unveiled their action plan. The renewed grant aligns with the Startup India action plan. Since its inception, the Department for Promotion of Industry and Internal Trade (DPIIT) has recognised over 1.5 lakh startups in India, and this project intends to further boost innovation and entrepreneurship in that country. Additionally, the initiative has significantly contributed to India’s startup boom by increasing domestic investment and innovation-driven enterprises.
Through financial aid and the relaxation of capital restrictions, the government intends to support the growth of Indian entrepreneurs and establish the country as a global hub for innovation.
Disclaimer: The above news was carried forward from FM Nirmala Sitharaman’s speech on the Union Budget 2025, and it should be taken for educational purposes only. All the information is in the public domain. Moneydaily.in or its Author are not liable for any loss or decisions based on this news.
Leave a Reply