The Yogi Adityanath government of Uttar Pradesh is setting up an innovation fund worth ₹4000 Cr. to promote startup culture in the state. For same, the state government will have a share of Rs 400 crore while the rest of the Rs 3600 crore will be raised through private investors.
For an uninitiated, the Uttar Pradesh Start-up Policy gives thrust to — "Start in Uttar Pradesh (START-IN-UP)" — to promote startup culture & entrepreneurship in Uttar Pradesh. Under this, the state government has decided to constitute Uttar Pradesh Innovation Fund (UPIF). The state government's commitment to UPIF will be Rs 400 crore. Efforts will be made to get funds ranging from Rs 1200 crore to Rs 3600 crore from private investors for UPIF.
In UPIF, an amount of Rs 400 crore will be made available to technical and higher educational institutions as part of the commitment of the state government. They will have to provide this amount in two to three years, which are not to be provided in lump sum amount.
The government will take a decision on the basis of the recommendations of the Empowered Committee constituted under the chairmanship of the Chief Secretary regarding the nature of UPIF, its operation and the determination of the funds contributed by various technical and higher educational institutions in relation to the commitment of the state government.
The fund's investment manager will be responsible for raising funds for UPIF from private investors. He will also be responsible for the management and investment decisions of UPIF.
Technical Education Department will be the nodal department for formation and operation of UPIF. The returns on investments made from UPIF will be divided among the contributors in the ratio of their contribution.
The fund will be operated through three entities - law firm, trust and investment manager. These three units will be selected by the Technical Education Department.
Under this , first the law firm will be selected. The selection of the trust and investment manager will be done after the various documents prepared by the law firm are approved by the state government.
After this UPIF will be formally launched. The investment manager will have to contribute 2.5 per cent of the total fund size or Rs five crore, whichever is less. The investment manager shall, from time to time, constitute a Venture Capital Fund and register it with the Securities Exchange Board of India (SEBI) under the category of Alternative Investment FUND (AIF). After the formation of the Venture Capital Fund, the Investment Manager will request private investors and the State Government to provide capital as per their commitments.
To protect the interests of investors, an advisory committee will be constituted by the investment manager, in which representatives of investors and the government will be members.
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