startup funding

Rs 10,000 Crore Startup Fund Announced In 2014 Is Still Unused & Stuck Due To Bureaucracy

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Indian governments for long have had the reputation of announcing things (schemes, funds etc.) that seldom see the day of light. And, as it turns out, the Narendra Modi government is no different.

The much ambitious Rs 10,000 crore startup fund announced by the Modi government in financial budget of year 2014 is still lying unused as no one is clear which government department is responsible for managing the scheme.

Allocated to the Small Industries Development Bank of India (SIDBI) by the Reserve Bank of India, the capital has to be invested in Indian startups through a way of providing them soft loans, equity and other risk capital.

According to inside sources in the government, though the announcement was made way back in mid-2014, the RBI released the money only in May 2015. And till date, no startup has gained any benefits from the money.


Further, different officials in the Finance Ministry seemed to be on different pages when it comes to the initiation of the fund. While according to one, the Ministry will soon announce the first batch of investments from the fund, another officer confesses that he has no idea whatsoever about the allocation of the Rs 10,000 crore fund and passes on the responsibility to another department.

While the official in charge of the disbursement of the fund is Ministry of Micro, Small and Medium Enterprises (MSME) but the officials there are also not able to give any clarity on the future of the fund.

According to some industry experts, the implementation of the scheme would have been much easier if the government would have formed a board to select the startups eligible for the fund, as currently, no one has any clarity where he/she needs to apply if they want funds for their startup.

The government’s interest in the industry is not all of a sudden. With a growth prospect of 40 per cent and a capacity to generate 80,000-85,000 jobs in a period of just two years, startups have obviously caught urban India by storm, and have thus also triggered the interest of the government.


Similar to the Rs 10,000 crore fund, was the Rs 5,000 crore one announced for small enterprises in the Budget 2012 by the then finance minister Pranab Mukherjee. The 5,000 crore still remains a non-starter with more than 90 per cent of it remaining untouched.

While the announcements of such schemes and funds are good for the industries and economy, the government needs to make special effort to foresee successful implementation of these policies. And, as far as the Modi government and the Rs. 10, 000 Crore fund is concerned, they need to understand one thing very clearly, while they might have announced the fund to woo the startup industry and young entrepreneurs, non-initiation of such schemes can draw major wrath and have a negative impact on the government’s popularity and hence, its votes.

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