Budget 2025: FM Nirmala Sitharaman announces Rs 10k crore Fund of Funds to boost startups

The announcement assumes significance as the government is focusing on promoting innovation through startups.
Union Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26, as Prime Minister Narendra Modi, Defence Minister Rajnath Singh, Home Minister Amit Shah and others look on in the Lok Sabha during the Budget session of Parliament, in New Delhi, Saturday, Feb. 1, 2025.
Union Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26, as Prime Minister Narendra Modi, Defence Minister Rajnath Singh, Home Minister Amit Shah and others look on in the Lok Sabha during the Budget session of Parliament, in New Delhi, Saturday, Feb. 1, 2025.(Photo | PTI)
Updated on: 
2 min read

BENGALURU: With an aim to boost the start-up ecosystem in the country, Finance Minister Nirmala Sitharaman on Saturday announced that the Alternate Investment Funds (AIFs) will be supported by the Rs 10,000 crore commitment.

"A new Fund of Funds with expanded scope and a fresh contribution of another Rs 10,000 crore will be set up," she said during her Budget speech.

Anirudh A. Damani, Managing Partner, Artha Venture Fund says this is a significant step forward for the Indian start-up and investment ecosystem. "The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and this fresh infusion will attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital. This initiative will provide much-needed growth capital to early-stage start-ups," he said.

The finance minister also announced that a deeptech Fund of Funds will also be explored to catalyse the next generation start-ups. Another important highlight in her speech is the proposal to extend the benefit provided under Section 80-IAC to start-ups for another period of five years. This means the benefit will be available to eligible start-ups incorporated before April 1, 2030.

A new scheme will be launched for 5 lakh women, Scheduled Castes and Scheduled Tribes first-time entrepreneurs. This will provide term loans up  to Rs 2 crore during the next 5 years.

Also, to improve access to credit, the credit guarantee cover has been enhanced for start-ups. Mayuresh Raut, Managing Partner, Seafund said, "The increase in credit guarantee for start-ups from Rs 10 crore to Rs 20 crore is a much-needed demand that has been finally accepted. This will not only enable start-ups to have access to debt capital it will also help them scale faster with less equity dilution. Hence, it will lead to a virtuous cycle of higher top line, less equity dilution, better valuation and better fundraising."

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26, as Prime Minister Narendra Modi, Defence Minister Rajnath Singh, Home Minister Amit Shah and others look on in the Lok Sabha during the Budget session of Parliament, in New Delhi, Saturday, Feb. 1, 2025.
HIGHLIGHTS | Budget 2025: No income tax up to Rs 12 lakh, new income tax bill next week

Related Stories

No stories found.

X
The New Indian Express
www.newindianexpress.com