Ranking of States on Support to Start-up Ecosystems

The Department for Promotion of Industry and Internal Trade (DPIIT) had conducted the second edition of the States’ Startup Ranking Exercise. The key objective of the exercise was to foster competitiveness and work proactively towards uplifting the startup ecosystem.

States’ Startup Ranking Framework

• It comprises 7 broad reform area which consists of 30 action points including.
  1. Institutional Support,
  2. Easing Compliance,
  3. Relaxation in Public Procurement norms,
  4. Incubation support,
  5. Seed Funding Support,
  6. Venture Funding Support, and
  7. Awareness & Outreach.
• States are classified into 5 categories, for the purposes of Ranking,
  1. Best Performers,
  2. Top Performers,
  3. Leaders,
  4. Aspiring Leaders and
  5. Emerging Startup Ecosystems.

 Key highlights

• Gujarat has been categorised as the best performer among all States and one Union Territory (UT), Delhi.
• Karnataka and Kerala have been ranked as ‘top performers’
• Bihar, Odisha and Rajasthan have been ranked as the ‘leaders’
• 22 States and 3 UTs had participated in the exercise.
• More than 36,000 startups were recognised.

Significance

• This will create a competition among states and Uts.
• It would help in promoting the start-up ecosystem by the Centre, States and UTs.
• It will encourage mutual learning among all states.
• It will also provide support in policy formulation and implementation.

Funding

To fund the start-ups, ‘Fund of Funds’ and many PSUs were supporting and came forward with dedicated funds.

What is Fund of Funds (FOF)?

A FOF or the multi-manager investment is a pooled investment fund. It invests in other underlying funds. It replaces any investment directly with the bonds, stocks, and securities. FOFs usually invest in mutual funds or hedge funds. Following FOFs are in demand in India:

• Asset Allocation Funds, that invest in a variety of asset classes including equity
• debt, commodities, gold etc.
• International Funds of Funds investing in mutual funds
• Gold Funds Investing into physical gold.

Month: Current Affairs - September, 2020