The Government has created a special fund for establishing start-up companies in the country. SIDBI has been contributing to various Venture Capital Funds (VCFs) since 1995. A Rupees Ten Thousand crore fund was proposed in the 2014-15 Budget to act as a catalyst to attract private capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies. Reserve Bank of India (RBI) has already allocated ₹ 10,000 crore to SIDBI from Priority Sector Lending (PSL) shortfall for a period of 3 years.

 This was stated by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha today.

Special fund for start-up companies mobilizes public allocation to attract private risk capital for startups. Creation of a special fund for start-up companies channels government-directed resources to SIDBI to catalyse private investment into early-stage businesses by providing equity, quasi-equity, soft loans and other risk capital; an allocation from Priority Sector Lending shortfall has been applied to SIDBI for a multi-year implementation period.