The government has, in a gazette notification, listed the eligibility criteria for the Rs 945 crore Startup India Seed Fund Scheme (SISFS), announced earlier this month by prime minister Narendra Modi.
The Department for Promotion of Industry and Internal Trade (DPIIT) will manage the fund and offer financial assistance to selected startups and incubators in the country across five years, starting 2021, the notification said.
DPIIT-recognised startups that are less than two years old can apply for the sector-agnostic fund through the Startup India portal, it said.
Eligible startups include those that have a business idea to develop a product and viable commercialisation plans, apart from having Indian promoters as majority shareholders.
They must also not have previously raised more than Rs 10 lakh from any state or central government schemes. However, this condition excludes prize money and subsidised working space or access to labs and prototyping facilities.
“Preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc,” the notification said.
Additionally, incubators over two years old, which are assisted by central or state governments, can apply for the programme. Those not supported by the government must be at least three years old, the notification said. These incubators must not have deployed capital from a third party as seed capital for incubated startups, it added.
The incubators will be chosen by a DPIIT-constituted Experts Advisory Committee (EAC), which will include representatives from DPIIT as well as the departments of biotechnology, and science and technology; the Ministry of Electronics and Information Technology; NITI Aayog; and the Indian Council for Agricultural Research. It will also comprise at least three DPIIT-nominated members, who are experts in the startup ecosystem, investors or experts in the domain of technology development, commercialisation, R&D and others.
Selected incubators will be given a grant of upto Rs 5 crore in three or more installments based on milestones. The incubators can, in turn, disburse grants of upto Rs 20 lakh to select startups for validation of proof of concept or prototype development, and upto Rs 50 lakh for market entry and commercialisation.