New Delhi, Feb 4 (PTI) – The government’s newly unveiled Rs 10,000 crore Fund of Funds Scheme (FFS) aims to drive growth in manufacturing and high-tech sectors, sectors that typically require long-term capital, according to a top government official.
Amardeep Singh Bhatia, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), explained that this fresh iteration of the FFS would be distinct from previous funds, specifically targeting startups operating in high-end technologies and those focused on improving public service delivery.
The FFS, announced during the recent Budget, seeks to foster entrepreneurial growth by addressing the unique funding needs of startups that require capital for extended periods. While a similar fund was launched in 2016 with a corpus of Rs 10,000 crore, the new scheme will evolve the framework further to support diverse startups.
“The first series of FFS helped in establishing the Alternate Investment Fund (AIF) ecosystem, providing essential capital to startups,” Bhatia noted. "For this second phase, we have already conducted consultations with AIFs and SIDBI, and we expect this scheme to cater to a broader spectrum of startups, especially those needing funding beyond equity infusion and for longer durations."
Unlike the previous scheme, this new FFS will not be an extension of the existing fund but a standalone initiative.
The original FFS has already catalyzed investments exceeding Rs 21,700 crore through AIFs, supporting over 1,180 startups. These AIFs have collectively raised approximately Rs 91,000 crore from various investors.
“Under the new scheme, we want to expand its scope," Bhatia added. "The previous scheme had a 10-year funding horizon, but now we plan to extend it to 14 or 15 years, which better aligns with the funding needs of high-tech sectors that have longer gestation periods." Discussions are also underway regarding the possibility of reworking the per-startup funding cap, with debt funds also being considered as a viable option.
Sanjiv, Joint Secretary at DPIIT, further elaborated on the scale of ambition for the new FFS, saying, "We are aiming for a 20-fold mobilisation of funds with the new scheme, compared to the 10-fold achieved under the first FFS."
The Budget also highlighted a special FFS for Deep Tech Startups, which will focus on providing "patient capital" to support disruptive innovations and larger ticket funding. Bhatia mentioned that consultations were ongoing to ensure that this part of the scheme adequately addresses the long-term capital needs of deep tech startups.
In addition to the FFS, the government’s Budget included provisions for the Jan Vishwas Bill 2.0, which aims to decriminalise over 100 provisions across various laws. Bhatia stated that 11 ministries had participated in drafting these amendments, which would affect laws like the Motor Vehicles Act, Textile Committee Act, and Legal Metrology Act.
Notably, the earlier Jan Vishwas (Amendment of Provisions) Act, 2023, succeeded in decriminalising 183 provisions across 42 different Acts.
Amardeep Singh Bhatia, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), explained that this fresh iteration of the FFS would be distinct from previous funds, specifically targeting startups operating in high-end technologies and those focused on improving public service delivery.
The FFS, announced during the recent Budget, seeks to foster entrepreneurial growth by addressing the unique funding needs of startups that require capital for extended periods. While a similar fund was launched in 2016 with a corpus of Rs 10,000 crore, the new scheme will evolve the framework further to support diverse startups.
“The first series of FFS helped in establishing the Alternate Investment Fund (AIF) ecosystem, providing essential capital to startups,” Bhatia noted. "For this second phase, we have already conducted consultations with AIFs and SIDBI, and we expect this scheme to cater to a broader spectrum of startups, especially those needing funding beyond equity infusion and for longer durations."
Unlike the previous scheme, this new FFS will not be an extension of the existing fund but a standalone initiative.
The original FFS has already catalyzed investments exceeding Rs 21,700 crore through AIFs, supporting over 1,180 startups. These AIFs have collectively raised approximately Rs 91,000 crore from various investors.
“Under the new scheme, we want to expand its scope," Bhatia added. "The previous scheme had a 10-year funding horizon, but now we plan to extend it to 14 or 15 years, which better aligns with the funding needs of high-tech sectors that have longer gestation periods." Discussions are also underway regarding the possibility of reworking the per-startup funding cap, with debt funds also being considered as a viable option.
Sanjiv, Joint Secretary at DPIIT, further elaborated on the scale of ambition for the new FFS, saying, "We are aiming for a 20-fold mobilisation of funds with the new scheme, compared to the 10-fold achieved under the first FFS."
The Budget also highlighted a special FFS for Deep Tech Startups, which will focus on providing "patient capital" to support disruptive innovations and larger ticket funding. Bhatia mentioned that consultations were ongoing to ensure that this part of the scheme adequately addresses the long-term capital needs of deep tech startups.
In addition to the FFS, the government’s Budget included provisions for the Jan Vishwas Bill 2.0, which aims to decriminalise over 100 provisions across various laws. Bhatia stated that 11 ministries had participated in drafting these amendments, which would affect laws like the Motor Vehicles Act, Textile Committee Act, and Legal Metrology Act.
Notably, the earlier Jan Vishwas (Amendment of Provisions) Act, 2023, succeeded in decriminalising 183 provisions across 42 different Acts.
