Kerala: LDF Govt Plans to Double ‘Scale up Funds’ to Empower Start-ups
The ‘scale-up fund’ provided by the Kerala State Industries Development Corporation (KSIDC) for successful start-ups is set to be doubled from Rs 50 lakh to Rs 1 crore. This announcement was made in the ‘Scale Up Conclave’ held in Thiruvananthapuram by the minister for industries recently.
For three consecutive years, Kerala has been awarded as the ‘top performer’ among states in the start-up sector by the department for promotion of industry and trade (DPIIT). As a result, the Left Democratic front (LDF) government has decided to extend more support to start-ups by setting up a special division in SupplyCo to market and sell start-up products and also procure directly from them.
The Kerala StartUp Mission (KSUP) acts as the implementing agency for the Kerala Technology Start-up Policy and is the nodal agency promoting entrepreneurship in the state.
More steps are being initiated to bridge the industry-academia linkage to promote entrepreneurship and to set up at least 1,000 entrepreneurship development cells (EDC, the minister said.
FOCUS ON STARTUPS
The KSUM was launched in 2006 and was elevated as the nodal agency in 2015. The new State IT Policy, 2017, made the intention of the LDF government clear on prioritising start-ups. Since then, Kerala has made rapid strides in promoting and funding start-ups.
With 10 lakh sq ft of incubation space, more than 3,900 start ups and 7,000 ideas and crores of seed fund and equity shares, the start-up ecosystem of the state has been ranked the best in Asia.
The Scaleup Conclave was organised by the department of industries, KSIDC and KSUM to provide space for airing the concerns of the start-ups in scaling up the operations and staying back in the state.
“The government aims to further improve the positive atmosphere for start-ups. The scale-up fund will soon be doubled to Rs 1 crore from Rs 50 lakh”, said Rajeeve.
The government has also decided to extend the schemes and financial aid provided to IT start-ups to non-IT start-ups as well. Branding policies including Made in Kerala and Branding in Kerala would be rolled out for market capitalisation.
‘KERALA’S ACHIEVEMENTS UNDERMINED’
Kerala has been generally perceived as an “unfit” state for industries to grow, but the minister, during his address, listed the achievements made by the state in recent years.
“Kerala has jumped from 28th position to 15th in the ranking of ‘Ease of doing Business’. But a lot of negatives are being spread about the state. The state winning the best performing state award for start-ups is another achievement”, Rajeeve said.
The state is home to south Asia’s largest product development centre, 375 Innovation and Entrepreneurship Development Centres (IEDC), 1 Super Fab lab, 3 Fab Labs, 20 mini Fab Labs.
“In the first six months of 2022-23, around 61,350 MSMEs have been registered at an investment of Rs 3,733 crore creating 1,35,308 employments. Until recently, Kerala had 10,000 new MSMEs per year which has increased to 10,000 per month which signals the positive atmosphere”, Rajeeve said.
The state is also exploring the possibilities to become a semi-conductor hub by collaborating with the India Electronics and Semiconductor Association, with detailed project reports from KELTRON, Centre for Development of Advanced Computing and Vikram Sarabhai Space Centre.
Universities and educational institutions are being encouraged to promote entrepreneurship related activities, with 1,000 EDCs being planned.
SEED AND SCALE UP FUNDS
KSIDC and the KSUM have been providing two types of funds, Seed Fund and Scale-up Funds to promote start-ups. The Seed Fund, funds 90% of the amount required or Rs 25 lakh to start an enterprise at a Reserve Bank of India (RBI) rate of interest of 5.65%.
The Scale-up Fund, now at Rs 50 lakh, is provided to successful start-ups at 7% rate of interest. The government has earmarked Rs 7 crore for this fund.
The government has provided the option to convert such loans into shares of the KSIDC by mutual agreement, which stands now at Rs 2,000 crore as equity investments.
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