RBI’s ‘Start-up Action Plan’ to bring in foreign funds for start-ups

RBI has taken steps to ease doing business and contribute to an ecosystem that is conducive for the growth of start-ups The Dollar Business Bureau

New measures to be directed towards enabling framework with respect to cross border transactions to start-ups receiving foreign venture capital

Keeping pace with the government’s Start-up initiative, the Reserve Bank of India(RBI) is taking lot of effort to create a conducive environment for the growth of Indian start-ups. “RBI has launched a Start-up Action Plan to enable easy access of foreign funds for Indian Start-ups,” said Jayant Sinha, Minister of State for Finance, GoI, on Friday. Stating that RBI has taken steps to ease business environment, the Minister informed that these measures would be implemented as a part of the framework that would ease cross-border transactions. These include foreign investments, external commercial borrowings, trade, among others. The conducive environment thus created would help start-ups receive foreign venture capital, differing contractual structures embedded in investment instruments, deferring receipt of considerations for transfer of ownership, facilities for escrow arrangements and simplification of documentation and reporting procedures, the Minister added. It is noteworthy that a five-fold hike has been taken by the government for funding start-ups in the next fiscal under the ‘Start-up India’ initiative. The Department of Science and Technology had recently announced that it will provide a seed capital to 50-80 new ventures with funds ranging from Rs.50 lakh to Rs.1 crore per company in FY’17. The Minister also informed about governmental initiatives towards industrial development, which include setting up of National Investment and Manufacturing Zones (NIMZs) along the Delhi Mumbai Industrial Corridor (DMIC). While eight NIMZs would be set up along DMIC, fourteen NIMZs have been given in-principal approvals for setting up in regions outside DMIC. “For the Financial Year 2016-17, Rs.3.35 crore has been earmarked under the ‘Scheme for Implementation of National Manufacturing Policy’ for ‘Master Planning of NIMZs’ and Technology Acquisition and Development Fund (TADF),” the Minister informed. Lauding the country’s overall development, the Minister also informed that India stands at 22^nd position out of 60 countries in the Best Countries Report 2016, which were assessed based on a composite performance ranking of key business, economic and quality of life data.

March 12, 2016 | 04:33pm IST

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The Dollar Business Bureau - Mar 12, 2016 11:11 IST

RBI’s ‘Start-up Action Plan’ to bring in foreign funds for start-ups

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