India to Launch ‘Start-up India Seed Fund Scheme’

The government has announced for the launch of Start-up India Seed Fund Scheme (SISFS) on January 29, 2021. The Indian government has approved the Startup India Seed Fund Scheme (SISFS), which will provide early-stage funding to tech startups via a corpus of INR 945 Cr, to be disbursed through select startup incubators between 2021-25.

Start-up India Seed Fund Scheme (SISFS)

  • The scheme will be launched with a corpus of Rs 945 crore.
  • The scheme was launched with the aim of providing the financial assistance to start-ups for the product trials, market-entry, proof of concept, prototype development and commercialization.
  • The funds under the Start-up India Seed Fund Scheme will be disbursed through the selected incubators across the country.
  • The scheme will be in mission mode for the year 2021-25.
  • The official notification on the launch of SISFS was released by the Department for Promotion of Industry and Internal Trade (DPIIT).
  • The overall execution and monitoring of the SISFS will be done by the DPIIT. The DPIIT will form an Experts Advisory Committee (EAC) to look after the same.
  • The Expert Advisory Committee (EAC) will evaluate and select the incubators in order to allot the Seed Funds, take all required measures for efficient utilization of funds and to monitor the progress.
  • The seed support will be provided only once to any start-up.

Which start-ups are eligible under the scheme?

  • The funds under SISFS can be availed by a start-up that are incorporated not before the 2 years ago at the time of application.
  • The Start-ups will be recognized by the DPIIT.
  • The start-up seeking funds under the scheme must have a suitable commercially viable business idea and it should use technology in its core product or service.
  • The notification highlights that, preference will be given to start-ups that create innovative solutions in sectors such as waste management, social impact, healthcare, textiles, agriculture, water management, defence, food processing, education, energy, railways, financial inclusion, mobility, space, oil, gas and biotechnology.
  • Start-ups should not have received monetary support of more than Rs 10 lakh under any other central or state government scheme.
  • It should have at least 51% shareholding by Indian promoters at the time of application to the incubators in accordance with the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

Conditions for Incubators

As per the eligibility conditions, the incubators must be legal entities. It must be operational for at least 2 years on the date of application to the scheme.  Further, it should have at least five start-ups undergoing incubation physically and should have the seating capacity for at least 25 individuals. They should have a full-time CEO and a capable team.


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