Startup Policy by Uttar Pradesh Government

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Uttar Pradesh Government has come up with Information Technology and Start up Policy 2016, which is designed to attract Large and MSME IT/ITeS companies along with Startups / Entrepreneurs.

Policy will be implemented on following Strategy points:

  1. IT Infrastructure Development
  2. Human Capital/Skill Development
  3. Incentives
  4. Industry Facilitation.

With focus on Startups and Entrepreneurs, Government of Uttar Pradesh has started their own incubator in Ghaziabad and Lucknow: IT UPVAN

Maximum population in Uttar Pradesh is Rural based, keeping that in mind they have come up with Rural incubation and training centers across 13 cities which is called eSETU (e-skill Entrepreneurship Training unit).

Government has decided to support startups using Fund of Funds model which they have termed as INFUSE model (Incubators – Fund of Funds – Startup Entrepreneurs). In this scheme government will provide funds to incubators, Venture Capitalists, Angel Investors who in turn will invest those funds in startups. Government has decided to initially start with INR 100 Crores to promote and start incubators, training centers and will release additional funding basis the requirements and progress. They will also invest 25% of the money invested by VCs only if the Startup is based in Uttar Pradesh.

Startups in U.P. to focus on IT enabled domains like e-commerce, new technologies in IT and Electronics sector, VLSI Design, Mobile technologies etc.

Department of IT and Electronics will nominate nodal agencies to promote incubators and Startups so any institution who wants to start incubator needs to be registered with a nodal agency. To promote new incubators, Government will start Government or Semi-Government institutes in the state to start with setting up new incubators in the state. They will be provided with funding of maximum 50% of IT Infrastructure setup with upper limit of INR 25 Lakhs.

Incubators will be required to appoint 2 mentors (1 from Academics and another from Industry) who will be paid honorary fees of INR 2 Lakhs per annum.

Startups will be funded basis the following criteria:

At Prototype Stage: INR 15,000 per month for 1 year when the project is recommended by Nodal Agency and designated committee has approved it.

At Pilot Stage: Pilot stage is further split into 3 phases to enable Startup’s product or services. Once the 25% of funding is received from Venture Capitalists, state will provide marketing assistance of INR 10 Lakhs or 25% of actual cost whichever is lower.

Government will also monitor each startup’s performance and how the funds are managed by seeking MIS reports on quarterly basis.

For Policy Details:

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Alisha Madaan

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