Nov 232016
 

DIPP Proposes Collateral-Free Loans For Startups  

Employment in India is coming down to a great extent in the recent days. There are many people now interested to work only in big corporate and private companies only. It is also a very difficult task for people to get recruitment in government sectors as there is heavy competition in all sectors due to the nature of population India. In such situation, it is one of the biggest responsibilities for the government of India to promote policies and schemes that will generate more new employment opportunities for people.

DIPP Proposes Collateral-Free Loans For Startups

S.No Interesting Facts Detailed Information
1 DIPP Department of Industrial Policy and Promotion
2 Schemes which are benefited under this Collateral-Free Loans Start-up India Scheme and Stand-up India Scheme
3 Aim of lending Collateral-Free Loans To Promote Innovation and To Promote entrepreneurship
4 Funds allotted under this DIPPS Collateral-Free Loans 10,000 Cr
5 Expected Number of Jobs to be Generated Under Indian Startups 18 Lakh Jobs
6 Who empowered to allocate the funds? Small Industries Development Bank of India (SIDBI)
7 Number of Startups formed under this scheme 600 Startups across the nation
8 Funds utilized under this scheme Rs. 1100 Crore

Necessity of promoting startups:

It was earlier a trend for most of the Indian governments and parties both in central and state level to encourage only some set of big companies every time and make them open big companies and industries such that many people will get mass recruitment. This trend has now gone down to a great extent as most of the big companies in India are not willing to start anything new with big investment in the recent days. They are more interested to keep their investment safe and work with what they have.

This trend, if continues for a long period of time, will result in more unemployment and create many social issues. Government has made a number of discussions with concerned departments and came up with a decision to promote entrepreneurs and startups to develop something new. This decision even though considered to be a critical one, is the only viable solution that can be identified by government to solve the problem of unemployment at the current point of time.

Easy loan for startups:

To make sure that startup firms are flourishing in a better manner, government has decided to provide collateral free loans for those firms through various government departments. Department of Industrial Policy and Promotion, which is popularly called as DIPP is the master brain behind all initiatives that has made by the government. The problem that are faced by the startups in the current situation is that

  • Most of the government banks and private banks are asking for several documents and compensation for granting loan request from startup firms
  • There is no separate organization formed by government to look into the problems that are faced by the startup firms
  • Immense documentation and requirement of collateral guarantee forces startup firms to rely on the private money lending firms which is pushing them into various dangers

To address all issues that are faced by the startup firms, DIPP has come up with a best solution for disbursing the funds that are allocated for the startup firms. Instead of providing funds for startup firms only through a single organization, DIPP has decided to set up various alternate investment funds that will take care of the concerns that are raised by the startup firms. This alternate investment funds will be under direct control of SEBI, which will regulate the flow of fund from government to the startups.

There are a number of initiatives now planned by DIPP to make sure that there is no barriers present in the middle that will hinder the flow of fund. It has been decided by DIPP that there should be no influence of politics in the process of disbursing funds. This ensures that only right candidates with the viable skills can only be entitled to receive funds from DIPP.

If the proposals that are set forward by DIPP are to come into reality, then it is very easy for government to accelerate the growth of startups in a better manner. Many innovative brains and talents will be benefited because of the best initiative taken by DIPP.

Experts View:

As per the economic experts across the nation, if funds were utilized properly under this scheme it will be a real boost to the Indian economy growth. Also they welcomed the government decision of seeking ideas from the Indian entrepreneurs about sharing ideas to help new startups to bloom across the nation.

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