• Source:JND
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Budget 2025: Finance Minister Nirmala Sitharaman introduced key reforms in the Union Budget for FY 2024-25 on February 1, bringing significant relief for middle-class salaried taxpayers. One of the major announcements was the launch of a new Fund of Funds Scheme (FFS) with a Rs 10,000 crore corpus to support and nurture startups across the country.

This is not the first time the government has introduced such a scheme. Back in 2016, a similar Rs 10,000 crore fund was launched, with contributions spread over two Finance Commission cycles (14th and 15th). The initiative aimed to fuel venture capital investments, helping early-stage businesses secure funding for expansion.

The Small Industries Development Bank of India (SIDBI) oversees this scheme by providing capital to Securities and Exchange Board of India (SEBI)-registered Alternative Investment Funds (AIFs), which then invest in promising startups.

A New Push for Startup Growth

During the Budget announcement, Finance Minister Sitharaman highlighted that AIFs supporting startups have received commitments worth over Rs 91,000 crore. These funds play a critical role in scaling up emerging businesses, creating jobs, and fostering innovation.

She further announced that a new Fund of Funds, with an expanded scope and an additional Rs 10,000 crore infusion, will soon be introduced.

In a recent meeting with the Department for Promotion of Industry and Internal Trade (DPIIT), several leading investment firms requested an increase in funding under the scheme. Notable AIFs benefiting from the FFS initiative include: Chiratae Ventures, India Quotient, Blume Ventures, IvyCap Ventures, Waterbridge Ventures, Omnivore, Aavishkaar Capital
JM Financial and Fireside Ventures.

To ensure that startups receive adequate financial support, AIFs backed by FFS are required to invest at least twice the amount committed under the scheme.

As of October 31, 2024, a total of Rs 20,572.14 crore has been invested in startups through FFS-supported AIFs. This reflects the government’s continued efforts to strengthen India's entrepreneurial ecosystem.

The Startup India Initiative: A Game Changer For Youth

Recognizing the need to support innovation and emerging businesses, the government launched the Startup India initiative on January 16, 2016. Under this program, startups meeting certain eligibility criteria receive official recognition, along with financial and policy support.

As per government records, as of October 31, 2024, 1,52,139 startups have been officially recognised across more than 55 industries.

Also Read: Budget 2025 LIVE: Nirmala Sitharaman Says Govt Putting More Money In People’s Hands With Rs 12 Lakh I-T Rebate

Multiple Schemes to Support Startups

The government has introduced several funding programs under Startup India to assist businesses at various growth stages. These include:

1. Fund of Funds for Startups (FFS) – Supports AIFs investing in startups

2.Startup India Seed Fund Scheme – Provides early-stage funding

3. Credit Guarantee Scheme for Startups – Offers collateral-free loans

These schemes ensure that innovative businesses receive financial backing to scale operations, create jobs, and drive economic growth.

With an additional Rs 10,000 crore investment in the Fund of Funds, the government is doubling down on its commitment to building a strong, self-reliant startup ecosystem in India. As more funds flow into the sector, entrepreneurs will find it easier to bring their ideas to life, contributing to the country’s economic progress.

 

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