Tamil Nadu has released a Startup and Innovation Policy 2018-23 to provide an ‘innovative’ system for startups registered in the state. It also plans to make Tamil Nadu a ‘Global Innovation Hub’ for startups by 2023, reports BusinessLine. Additionally, the Union Ministry for Electronics and IT (MeitY) will set up a Centre of Excellence for Fintech at Software Technology Parks of India (STPI) Chennai, per BusinessLine.
Startup and Innovation Policy
The state government said that its core objectives are to support infrastructure in areas like Internet of Things (IoT), artificial intelligence & machine learning, and software-as-a-service (SaaS).
The mission aims to create:
- At least 1 lakh high-skilled jobs in the startup ecosystem
- 500 technology startups of which at least 10 are startups in the social impact sector
What the state government will do
The TN government will create ecosystems for innovation, ensure that resources are available, and enable job creation and skill development. The Entrepreneurship Development Institute of India (EDII) will be the nodal agency to promote startups, while Tamil Nadu Startups and InnovaTN Mission (TANSIM) will advocate and oversee policy.
The state’s criteria to be recognized as a startup is:
- Registration under the TANSIM
- Date of incorporation below 7 years, and below 10 years for biotech and AI/ML startups
- Turnover of below Rs 25 crore
The state will also set up two funds to back up the startup:
- Tamil Nadu Startup Fund: It is registered as an Alternative Investment Fund (AIF), managed by Small Industries Development Bank of India (SIDBI) for investment in startups and MSMEs. This fund has a corpus of Rs 250 crore, the government’s investment will be up to Rs 75 crore, the first portion of Rs 25 crore will be allotted in FY19-20.
- Tamil Nadu Startup Seed Grant Fund: Grants under this fund will be allotted to financial institutions and universities to back early-stage fund needs of startups. It has a corpus of Rs 50 crore, with an allotment of Rs 5 crore in the first year.
CoE for Fintech
The objective of the center if to enable startups to help financial institutions find an alternative way to verify customers on the basis of existing KYC documents. The center will be set up in association with the Electronics Corporation of Tamil Nadu, and Rs 23 crore has been earmarked for it. Further, STPI has received a letter of intent from AU Capital Partners-UK and Pontaq-UK for $1 million.
Arun Jain, Chairman and Managing Director of the Chennai-based Intellect Design Arena, will be the Chief Mentor of the centre.