New Delhi, Feb 4 (PTI) The newly announced Rs 10,000-crore Fund of Funds Scheme (FFS) for startups, unveiled in the Budget, will focus on manufacturing and high-technology sectors, which require longer-term funding, a top government official stated on Tuesday.
Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Amardeep Singh Bhatia said this new scheme would be an entirely different fund that will address the needs of startups that lie between those dealing with high-end technology and the ones focussed on improving public service delivery.
The government on Saturday announced a new FFS with Rs 10,000 crore corpus to promote growth of budding entrepreneurs in the country. In 2016 also, the government launched a similar scheme, with a corpus of Rs 10,000 crore, with contributions spread over the 14th and 15th Finance Commission cycles.
Bhatia said the first series of FFS has helped in building the AIF (alternate investment fund) ecosystem in the country, which provided much-needed capital to startups.
For the second series, announced in the Budget, "We already had consultations with AIFs, with SIDBI...We expect that this should help in covering the large spectrum of startups which need longer duration of funds, which need different types of funding beyond the equity infusion," he added.
He stated that the new scheme would not be topping up the already functional FFS.
Through the first FFS launched in 2016 investment of more than Rs 21,700 crore has already been catalysed by Alternative Investment Funds (AIFs) in more than 1,180 startups.
These AIFs are mobilising a corpus of around Rs 91,000 crore by raising funds from other investors.
"We want to expand it (new FFS). There was a 10-year limit in the first one, now we can make it for 14-15 years that will meet the longer funding requirements which are into high-tech areas, whose gestation period is more," the secretary said, adding that the per startup cap can also be relooked.
Debt funds are also an option under discussions, he added.
Speaking at the briefing, Joint Secretary in the DPIIT Sanjiv said: "This will be different from the first one. We will try to bring something more. We will frame the scheme in a way so that 20 times fund mobilisation happens. In the first, 10x fund was mobilised".
The Budget also announced a FFS for deep tech startups to enable patient capital, support, disruptive innovations and for funding of larger ticket size.
"We will explore how we will bring FFS for deep tech startups as it requires long-term funds," Bhatia said, adding that consultations with the stakeholders are on.
On the Budget announcement about the Jan Vishwas Bill 2.0 for decriminalising more than 100 offences in various laws, the secretary said that 11 ministries have been involved in the exercise and the amendments have been proposed in areas like Motor Vehicles Act, Textile Committee Act and Legal Metrology Act.
The Jan Vishwas (Amendment of Provisions) Act, 2023 decriminalised 183 provisions across 42 Acts.
When asked about the plans to introduce production linked incentive (PLI) schemes for toys and footwear sectors, the secretary said: "This is the scheme (announced in the Budget 2025-26) which will be there for these two sectors." Finance Minister Nirmala Sitharaman has said in her Budget speech that the government will implement a scheme to make India a global hub for toys. It will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys.
She has also announced a focus product scheme for the footwear and leather sector. PTI RR HVA