The government had made no provision for its ambitious project, India Aspirations Fund (IAF) which is part startup India initiative. The allocation has been reduced to Rs.100 Crore from Rs 600 Crore which was made earlier for the current fiscal.
In august 2015, finance Minister Mr. Arun Jaitley has announced funding of Rs.2000 Crore with corpus, in order to provide support for startups through Fund operations.
LIC were partner and co-investor in the IAF.
As per the Budget 2017-18 documents, a provision of Rs 600 crore was made but reduced significantly to Rs 100 crore as per the revised estimate. When the fund was launched in financial year for 2015-2016 the government announced the funding of Rs 500 Crore.
It’s been a month after the budget is announced, but still the government has not made any allocation under the startup department for the next fiscal. At the time of the launch of the Fund, Mr. Jaitley had said it is expected to catalyze tens of thousands of crores of equity investment in start-ups and MSMEs.
Anshuman Verma, Founder and Managing Director at M1L said: “IAF is a good initiative of the government to support MSMEs and startups in India. Instead of or in addition to disbursing part of the allocated money to venture capital funds operating in India, government should think about cutting inefficiencies and bringing more clarity by way of forming an expert panel that disburses funds directly to startups.” Read more startup funding news.