Government has approved the establishment of “Fund of Funds for Startups” (FFS).   The corpus of FFS is of INR 10,000 crore over a period of 4 years (i.e. INR 2500 crore per year) which shall be released subject to progress of the scheme and availability of funds.

₹ 500 crore was released to Small Industries Development Bank of India (SIDBI) as first tranche in March 2016.   ₹ 600 crore has been provided in the budget for the current financial year.  Applications received from various Alternative Investment Funds (AIFs) for FFS support are under various stages of processing and approval.  Key features of FFS are annexed.  

An amount of ₹ 500 crore has been provided to the corpus of FFS in 2015-16. No such data is maintained centrally for assessing the impact of funds provided through FFS.  However, such a provision of funds supplements the domestic capital of startups and has a multiplier effect in stimulating economic growth leading to increased production and employment generation.

A Monitoring Committee comprising of Department of Industrial Policy and Promotion, Department of Revenue, NITI Aayog, Ministry of Micro, Small and Medium Enterprises, Department of Science and Technology, Department of Bio-technology, Department of Electronics and Information Technology, Department of Higher Education and Small Industries Development Board of India to monitor implementation of the Action Plan of Start-up India initiative has been constituted by this Department.

The Committee shall have the following roles:

1. Review the progress of Action Plan

2. Evaluate the quality and effectiveness of work done

3. Strategic and operational planning for implementation of various measures

4. Ensure that initiatives meet the needs of beneficiaries

5. Ensure that the initiative is able to demonstrate its impact in full measure

6. All measures taken comply with the law and are within the policy framework.

This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Lok Sabha

ANNEXURE

ANNREXURE REFERRED TO IN REPLY TO PART (b) OF THE LOK SABHA UNSTARRED QUESTION NO. 1350 FOR ANSWER ON 25.07.2016.

Key Features of FFS

Name of Fund	Fund of Funds for Startups
Fund Manager	Small Industries Development Bank of India (SIDBI)
Fund size	₹ 10,000 crore. The proposed corpus of ₹ 10,000 crore would be built up over the 14th and 15th Finance Commission cycles.
Investment Focus	The Fund shall be sector agnostic and ensure support to a broad mix of sectors such as manufacturing agriculture, health, education etc.
Purpose	The FFS shall contribute to the corpus of Alternative Investment Funds (AIFs). AIFs supported under FFS would in turn take up equity in various Start-ups at early stage, seed stage and growth stage (as defined under Startup Action Plan notified  on January 16, 2016, as modified by Government of India from time to time)

Fund of Funds for Startups to channel public corpus into AIFs for seed, early and growth equity investment. Governmental approval establishes a Fund of Funds for Startups to channel public corpus into professionally managed vehicles that invest in startups through Alternative Investment Funds (AIFs). The Fund is sector agnostic, contributes to the capital of AIFs which take equity in startups at seed, early and growth stages under the Startup Action Plan, and releases corpus subject to scheme progress and fund availability. A multi departmental Monitoring Committee will review progress, evaluate effectiveness, plan implementation, ensure beneficiary alignment, demonstrate impact, and ensure legal and policy compliance.