Credit Guarantee and Seed Fund Scheme for Start-ups to be made easier for new entrepreneurs in the country: Startup India Schemes. The government is preparing to take a big step towards making the path easier for start-ups in the country.
The Department of Industry and Internal Trade Promotion (DPIIT) is working on the Credit Guarantee and Seed Fund Scheme for start-ups. DPIIT Secretary Guruprasad Mohapatra gave this information. He said that the process of consultation on both these schemes is going on at the inter-ministerial level.
In an interview, Mohapatra stated that a fund will be created for the Credit Guarantee Scheme. Banks will be able to give loans to start-ups. He also clarified that the loan to be provided under this scheme would be capex credit, not venture capital.
Regarding the seed fund scheme, Mohapatra said that many times start-ups face difficulty in raising funds to move forward on their idea. Some states like Gujarat and Kerala have schemes like seed funds. Some central ministries are also running such a scheme. The government wants to bring a nationwide scheme in this matter.
Mohapatra said that both the schemes would have to be approved by the Finance Ministry. DPIIT will then seek approval from the Cabinet for these schemes. He said that some start-ups have also raised some issues related to ESOP (Employee Stock Option Plan). Their concerns have also been placed before the Revenue Department.
Regarding the next version of the state ranking regarding the start-up ecosystem, Mohapatra said that the department has started working in this direction. The department is encouraging states to come up with a start-up policy to encourage budding entrepreneurs.
Gujarat’s performance in the 2019 ranking was the best in terms of giving a better environment to new entrepreneurs. The Central Government launched the Start-up India Action Plan in January 2016 to promote new entrepreneurs. It has provisions such as tax exemption for start-ups and capital gains tax relief.
So far, 1.63 lakh crore loan sanctioned under ECLGS
Under the Emergency Credit Line Guarantee Scheme (ECLGS), loans worth more than Rs 1.63 lakh crore have been sanctioned to over 42 lakh people. The Finance Ministry gave this information on Sunday. Out of the total sanctioned debt, Rs 1.18 lakh crore has been given so far.
Loans up to three lakh crore rupees are to be given under this scheme announced under the Self-Reliant India Economic Package. The Finance Ministry has also informed the correct progress of the Rs 30,000 crore Special Liquidity Scheme for Non-Banking, Housing Finance Companies, and Monetary Financial Institutions (MFIs) under the Self-Reliant India Package.
The Ministry informed that Rs 10,590 crore has been sanctioned for 37 proposals. The process is proceeding on six applications worth 783.5 crores.