Tamil Nadu unveils startup policy to create one lakh jobs by 2023; proposes Rs 250 Cr startup fund
Tamil Nadu has joined the states that have a Startup Policy. Its policy aims to encourage innovation and boost the creation of jobs through entrepreneurial activities.
After brainstorming for about a year, the Tamil Nadu government has unveiled its startup and innovation policy that looks to create one lakh jobs, both direct and indirect over the next few years.
The state is also planning to set up the Tamil Nadu Startup Fund of Funds to the tune of Rs 250 crore, which will be registered as an Alternative Investment Fund (AIF), and managed by organisations like the Small Industries Development Bank of India (SIDBI) to invest in startups and MSMEs. The government announced it will invest Rs 75 crore in the fund and the first tranche of Rs 25 crore will be allotted in FY20. The state startup policy was unveiled by Chief Minister K Palaniswami recently.
Apart from this, the state will also set up Tamil Nadu Startup Seed Grant Fund (TNSSGF) of Rs 50 crore, with an allotment of Rs 5 crore in the first year. This will be created in partnership with financial institutions and universities to support early-stage startups with their financing requirements in the form of grants to help them with research and innovation, the policy document said.
Also read: These states have launched startup policies to give fillip to the ecosystem
Explaining the state’s startup policy, R V Shajeevana, Additional Director, Entrepreneurship Development and Innovation Institute of Tamil Nadu (EDII), an institute that will act as the nodal agency for the implementation of startup policy, said, “This is a broad policy document, and we will come out with the detailed guidelines shortly.”
She added that the new policy also encourages the participation of startups in government procurements. “We have introduced relaxation for startups so that they can participate in public procurements. Conditions like prior existence, turnover criteria, earnest money deposit (EMD), and others have been relaxed. This will help them to bid for tenders of smaller values. We have also allowed government departments and undertakings to procure products of smaller value from really innovative startups for at least two times in a financial year,” Shajeevana said.
Also read: State governments warm up to startups, award public contracts and partnerships
The government will also encourage entrepreneurs by giving them access to relevant data/information to create apps and technologies for public-good
Another interesting feature of the policy is the introduction of special grace marks and attendance relaxation for students if their project work gets converted into a startup in the incubator. The policy document also said, “Universities and colleges will encourage as many startups with inter-departmental and inter-institutional participation, taking note of the fact that startup planning and management requires inter-disciplinary skills. A deferred placement support system will be introduced in all colleges in consultation with industry as a measure of risk mitigation against failure of student startups.”
Tamil Nadu is also planning to encourage the setting up of corporate and private incubators through CSR funding. The policy says, “State PSUs and CPSUs shall be encouraged to adopt incubators and channelise CSR funds. These incubators shall also serve as an innovation sandbox to solve problems faced by PSUs and CPSUs, which in turn shall support startups with access to a platform, test bed, data, handholding, etc.”
In order to build a world-class startup ecosystem in the state, the government is also planning to rope in NRIs from Tamil diaspora, and will allot land at nominal lease for a duration of 99 years to establish ‘Startup Parks’ led by entrepreneurs/startups, including NRIs.”