Venture Capital Schemes in India

A venture, in business terms, is a startup or a business enterprise that has a high prospect of growth shortly. The startup has a high chance of making financial growth shortly or satisfying future demands. Venture capitalism acts as an important source of finance for aspiring entrepreneurs with new ideas. Along with the growth prospects, ventures involve risks as well, and, thus, they are needed to be taken proper care of. Venture capitalism in India has been a hot potato in recent times. As said by Dr APJ Abdul Kalam:

“The combination of entrepreneurship education in schools and colleges, the hassle-free flow of venture capital and evolution of a good market will give momentum for national growth.” 

Venture capitalism in India has reached an apex in the year 2020-21, whereby investments in India grew 3.8 times, 1.8 times more than that in China. 

History of Venture Capitalism in India

Venture capital plays an important part in innovative entrepreneurships in our country. Earlier, venture capital funding was carried out by the institutions called financial institutions whereby they promoted private sector corporate bodies giving debt as the capital strategy.

In India, venture capital was brought and established in 1988 when TDICI (Technology Development and Information Company of India Ltd) was promoted by ICICI (Industrial Credit and Investment Corporation of India Bank) and UTI (Unit Trust of India). The first private venture capital fund was sponsored by CFC (Credit Capital Finance Corporation), and it was promoted by BoI (Bank Of India), Asian Development Bank and the commonwealth development corporation.

Since the scope and quantity of business enterprises in India have increased, many international venture firms are trying their hands as capital providers. In 2020, even after getting struck by COVID, around 10 billion USD venture capital investment was attracted in India. After providing the funds, the investors remain active to ensure that the investment firms are on the right track. 

Venture Capital Schemes in India 

Venture capital plays an important part in innovative entrepreneurship in our country. Earlier, venture capital funding was carried out by financial institutions whereby they promoted private sector corporate bodies by giving debt as the capital strategy.

• Venture Capital Assistance Scheme: It is run by the Ministry of Agriculture and Farmers Welfare, whereby financial support is provided in the form of an interest-free loan to ventures that qualify the criteria to meet the shortfall in capital requirements for implementation of the project.

• Venture Capital Fund for Scheduled Castes: This is a social sector initiative to be applied nationally to sell entrepreneurship to many of the scheduled castes populace in India. “Entrepreneurship” pertains to marketers coping with groups that can be orientated in the direction of innovation and growth technologies. The spirit of the above-referred fund is to help the marketers who will create wealth and price for society and, at the same time, sell a worthwhile business.

Conclusion 

In the last few years, venture capitalism in India has started taking a boom, but this concept originated in India in the 1990s. Many national and international private firms have shown interest in the Indian venture capital market, and as a result, India’s growth in capital investments has excelled above that of China and other developed countries. The government is also running various schemes to give maximum assistance to aspiring entrepreneurs. Along with the different benefits of venture capitalism, some disadvantages are also associated. SEBI (Securities and Exchange Board of India) regulates the laws governing venture capitalism in India so that the giant corporations do not take unnecessary advantage of small growing ventures and startups.