The Commerce and Industry Ministry is considering asking for extra funding in the upcoming Budget to bolster innovation, with plans for a potential replacement scheme for the current seed fund program, which is due to end in 2025. The government’s objective is to aid early-stage entrepreneurs and foster deep tech startups to tackle societal issues. An official has indicated that the ministry may seek increased funds in the forthcoming Budget, to be unveiled by the new government, possibly in July, to stimulate innovation within the nation.

The seed fund program, introduced in April 2021 with a budget of Rs 945 crore, is scheduled to conclude in 2025. The Ministry may contemplate suggesting a fresh initiative following a similar framework. This scheme was devised to offer financial support to startups for activities like proof of concept, prototype development, product trials, market entry, and commercialization. The allocated fund was distributed over four years to provide seed funding to eligible startups through various incubators across the country.

Another official emphasized the critical importance of easy access to capital for entrepreneurs during the early stages of enterprise growth, noting that the availability of capital during this phase often determines the success or failure of startups with promising business concepts. With over 1.17 lakh startups registered with the government, these entities qualify for income tax and various other benefits, contributing to the creation of over 12.42 lakh direct jobs.

Additionally, the Ministry is anticipated to suggest a specialized policy tailored for deep tech startups. Deep technology encompasses innovations rooted in advanced scientific and technological advancements, possessing disruptive potential to address significant societal challenges in India.

The previous government placed significant emphasis on fostering startups, introducing the Startup India initiative on January 16, 2016. This initiative included an action plan aimed at cultivating a dynamic startup ecosystem within the nation, featuring schemes and incentives.

The action plan encompasses 19 measures covering a range of areas including streamlining processes, providing support and incentives for funding, and facilitating partnerships between industry and academia, as well as incubation support.