Joining the brigade of the Indian startup ecosystem, the Bihar government recently gave its nod for the launch of a startup venture capital fund, which will encourage young entrepreneurs in the State to start new ventures.
The approval to the Start Up policy, 2016 was given at a meeting of the cabinet presided over by Chief Minister Nitish Kumar. The Start Up venture capital of Rs 5,000 crore formed part of the CM's 'seven resolves', which the grand secular alliance government has adopted as policy of governance for the next five years. The cabinet gave its nod to 31 proposals of different departments at the meeting this evening, Principal Secretary Cabinet Coordination department Brajesh Mehrotra told reporters.
The State cabinet gave its go ahead to Information and Public Relations Department proposal to revise advertisement rates as part of state Advertisement Policy, 2016.
In another decision pertaining to the Urban Development and Housing department, the cabinet cleared a proposal to dedicate 30 percent of revenue of urban local bodies for the Chief Minister's drinking water project, 20 percent for building sewage pipes and others and the rest 50 percent for spending by the urban local bodies to meet expense of salary, pension and waste management.
Briefing media after the cabinet meeting, industries department principal secretary S Siddhartha said,
The startup policy would cater to the needs of emerging entrepreneurs and make Bihar a startup destination in India. He said 22 percent of the Rs 500 crore venture fund under the policy has been reserved for scheduled caste (SC) and scheduled tribe (ST) people. Industries not more than five years old and having a turnover of less than Rs 25 crore would be eligible for the benefits under this new policy, he said.
A trust would be formed under a manager to be appointed from outside the government to find out whether a particular company is fit to avail the fund facility under this policy. The trust would also provide necessary guidance to the entrepreneurs. As of now, development commissioner would be the chairman and industries department principal secretary the member secretary of the trust.
The State government would also provide common infrastructure like good working conditions with working space, cubical or the Internet facility for free for three years. The government would also provide grant-in-aid up to Rs 10 lakh in the beginning, depending on the concept and market value of the startup. Apart from this, two-percent cost incurred by the startup on formulating and promoting the new concept would also be borne by the government. The government would also provide two percent of the total cost incurred during fund-raising. If an entrepreneur manages to raise funds from other sources, the government would provide equal amount to the entrepreneur.
This policy would exempt the firms for five years from registering anywhere or take any licence, except in those areas where human safety is required, like drug or building safety. No inspection of startup would be done except in cases where human safety in under scanner and that, too, would be done by the district magistrate concerned, he said and added that a module on startup would also be incorporated in the state education system.