Framework for ₹500 crores Startup Fund by Rajasthan Government
Framework for ₹500 crores Startup Fund by the Rajasthan Government has been announced. The government has launched a framework through which, it shall provide equity funding and loans to startups based in Rajasthan. This intends to ensure that the funds are specially set aside for green startups and women entrepreneurs.
Vasundhara Raje, the Chief Minister of Rajasthan, had announced the fund in August 2017.
Rajasthan Startup Fund – Green Startups and Women Entrepreneurs
₹100 crores of the ₹500 crores of the fund have been set aside for Women Startups and ₹50 crores for Green Startups. The Green Startup fund shall be paid from the funds available with the Rajasthan State Pollution Control Board.
This Rajasthan Startup Fund will provide equity and loan to startups registered in the state of Rajasthan, based on the recommendations of the Committee to do so. The loan or equity will be granted, based on the Committee recommendation, by the sanctioned authority of the Principal Secretary of IT & Communication.
Rajasthan Startup Fund – The Details
The funding comes with a cap of ₹25 lakhs for every startup. This amount will be based on the startup’s ranking on the state portal – istart.rajasthan.gov.in.
Startups that are ranked Bronze or Silver will be provided a maximum of ₹15 lakhs, while those ranked Gold or Platinum will be provided a maximum of ₹20 lakhs. Signature startups will receive a maximum funding of ₹25 lakhs.
The time period for an equity funding will be a maximum of 7 years, with a lock-in period of 3 years. The startups shall have the share buy-back option from the time they receive the funding. Also, a representative from the Government will find a place on the Board of Directors.
The maximum time period in case of loans will be 3 years, with no lock-in period. The security-free loan amount will be repayable by the startups at any point during this time period, with no extra charges. The interest rate is 5% with a reducing balance. The startup will have to initiate repayment of the loan, 6 months post disbursal, in 6 monthly installments. It is mandatory to utilize the loan for the purpose with which it was taken.
The startups are going to be required to furnish their P&L Accounts and Balance Sheet, disclose their primary source of income, and furnish any other documents required.
The Rajasthan Government shall provide a seed funding of up to ₹2 lakhs in the form of a loan. The requirements for this loan shall remain the same as the regular loan.
Government Startup Funding & Job Creation
Multiple state governments across the country are coming up with Startup Funds & Policies, to encourage job creation through entrepreneurship.
The Karnataka Government Startup Policy in 2015 was among the first. Recently, the Karnataka Government also supported 100 startups with a ₹35 crores funding, through Elevate100.
Approximately 15 Indian states have announced their Startup Policies till now, including, Goa, Gujarat, Kerala, Andhra Pradesh, and Telangana.
Also, the Central Government has launched a North-East Venture Fund of ₹100 crores.
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