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Soon after the proposal of finance minister- Nirmala Sitharaman who proposed a national seed fund for the startups in the union budget 2020, the Department for Promotion of Industry and Internal Trade (DPIIT) has taken up the task to stir out the guidelines and rules.
DPIIT secretary Guruprasad Mohapatra stated that the department will concentrate and work on a National Seed Fund policy and creation of the fund. He also said that now they will move a Cabinet note and create a fund and guidelines in this regard.
On this Saturday February 1, the minister Sitharaman had called on all the Indian entrepreneurs and claimed that entrepreneurship has always been the strength of India and proposed a seed fund.
She also stated that they recognize and enhance, knowledge skills and risk-taking capabilities of the youth. They are not job seekers, but job creators.
Moreover, in the latter part of the government’s plan for 2020 in the union budget, the minister revealed the plans to set up a seed fund for early-stage startups.
During the presentation of union budget 2020 she stated that the government proposes to provide early life funding, including a seed fund to support development of early-stage startups. Moving ahead, the Modi government in its elections had declared plans to create an INR 20K Cr Seed Fund.
The declaration brought joy to the Indian startup ecosystem, as the government joins the industry in its efforts to support early-stage startup ecosystem with funding.
Additionally, Ramakant Sharma, cofounder and COO of Livspace stated that the proposal with regards to early life funding and a seed fund to support growth and development of early-stage startups would help encourage and motivate more individuals to become entrepreneurs. 
He said that this is a celebration of entrepreneurship, promoting the effortlessness of doing business, boosting the creation of jobs and furthering the development of the ecosystem.
Currently, there are over 416 venture funds who have a focus on the early-stage startups in India. 
Saurabh Srivastava, chairman, Indian Angel Network (IAN), an early-stage investor, stated that the measures declared on ESOPs, taxation and seed fund will infuse spontaneous energy in the ecosystem.
As when it comes to early-stage seed funding, the Indian startup ecosystem is going through a slowdown.
In the year 2019, the seed stage funding continued to fall. With $252 Mn in funding, the seed-stage deal value fell by 44% (compared to 2018) as only 306 seed funding deals were recorded.
Moreover, Bhavin Turakhia, founder and CEO, Flock claimed that the provision for setting up an investment clearance cell for entrepreneurs, an online portal to facilitate quicker business clearances, and a seed fund to support early-stage startups will all collectively attracts foreign investment in Indian startups and hence it is beneficial.

Authored by Farheen Malik , Content Developer (Startup Monk)


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CIN- U74999DL2019PTC347107