Know the Eligibility criteria of your Startup for financial assistance under Startup India Seed Fund Scheme

Know the Eligibility criteria of your Startup for financial assistance under Startup India Seed Fund Scheme

Eligibility criteria of your Startup - financial assistance - Startup India Seed Fund Scheme - Taxscan

The Government has notified Rs. 945 crore Startup India Seed Fund Scheme (SISFS), which will be operational from April 1, 2021, to 2025 as the government looks to boost the ecosystem, providing the crucial capital for new startups.

Here is the eligibility criteria for the Rs. 945 crore SISFS that the young companies may avail:

1. DPIIT recognised startups less than two years old

The Department for Promotion of Industry and Internal Trade (DPIIT) will manage the fund and offer financial assistance to selected startups and incubators in the country across five years, starting 2021.

For the startup to be eligible for the Scheme must be recognised by DPIIT, incorporated not more than two years ago at the time of application.

2. Startup must have Indian promoters as majority shareholders

Shareholding by Indian promoters in the startup should be at least 51 percent at the time of application to an incubator for the scheme.

3. Startup must not have previously raised funds under any state or central government schemes

The Startups should not have received more than Rs.10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money, subsidised working space, etc.

4. Preference given to startups creating eco-friendly solutions

Preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.

5. Eligibility for Incubators to apply for the program

Incubators over two years old, which are assisted by central or state governments, can apply for the programme. Those not supported by the government must be at least three years old. These incubators must not have deployed capital from a third party as seed capital for incubated startups.

The incubators will be chosen by a DPIIT-constituted Experts Advisory Committee (EAC), which will include representatives from DPIIT as well as the departments of biotechnology, and science and technology; the Ministry of Electronics and Information Technology; NITI Aayog; and the Indian Council for Agricultural Research. It will also comprise at least three DPIIT-nominated members, who are experts in the startup ecosystem, investors or experts in the domain of technology development, commercialization, R&D and others.

6. Assistance to Incubators

Experts Advisory Committee (EAC) constituted by DPIIT shall evaluate incubators for grant assistance. A grant of up to Rs 5 crore would be provided to a selected incubator in milestone-based three (or) more installments.

7. Disbursement of Seed Fund to startups by incubators

Selected incubators will be given a grant of up to Rs. 5 crores in three or more installments based on milestones. The incubators can, in turn, disburse grants of up to Rs 20 lakh to select startups for validation of proof of concept or prototype development, and up to Rs 50 lakh for market entry and commercialization.

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