What is Startup India?

• The Startup India initiative of the Government of India envisages building a robust Start-up ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs.
• Startup India Seed Fund Scheme (SISFS) is an initiative under the Startup India programme to provide financial assistance to early-stage startups.

What is Startup India Seed Fund Scheme?

• The Scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. 
• It is implemented with effect from 1st April 2021 with a corpus of Rs. 945 crores.
• A startup, recognized by the Department for Promotion of Industry and Internal Trade (DPIIT), incorporated not more than 2 years ago at the time of application, is invited to apply for the scheme. 
• DPIIT has created an Experts Advisory Committee (EAC) to execute and monitor the Startup India Seed Fund Scheme. The EAC will select eligible incubators who will be provided grants of upto Rs 5 Crores each. In turn, the selected incubators will provide startups with up to Rs 20 lakhs for validation of Proof of Concept, prototype development, product trials to startups.
• SISFS is a sector agnostic scheme, which means that startups from any sector can apply for the scheme. 
• However, 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, defense, space, railways, oil and gas, textiles, etc. 

What is a DPIIT-recognized startup?

• An entity shall be considered a “Startup” –

1. If it’s incorporated as either Private Limited Company or Registered Partnership Firm or Limited Liability Partnership. A sole proprietorship or a public limited company is not eligible as startup.
2. If it is up to 10 years from the date of its incorporation/registration.
3. If its turnover for any of the financial years has not exceeded INR 100 crore
4. If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
5. Should not have been formed by splitting up or reconstruction of a business already in existence.