The Bihar government gave its nod for the launch of a Start Up 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 fund, with a value of $750 Mn (INR 500Cr), is formed as part of CM Nitish Kumar’s ‘seven resolves’. It will be adopted as policy governance for the next five years in conjunction with the secular alliance government.
The cabinet gave a green signal to 31 proposals of different departments at the meeting such as raising advertising rates as part of the state’s Advertisement Policy, 2016 and set aside shares of revenue of local urban bodies for various state projects.
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.
Bihar joins a long line of states who are proactive and receptive to homegrown startups.
You can read the entire policy here :– Bihar Startup Policy
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.
Also Read : A Conclave to KickStart Start-Up in Bihar by BIA
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.
Telangana, Uttar Pradesh, Karnataka, and Rajasthan are the others states to have already announced policies pertaining to startups.