T.V. Mohandas Pai
The government’s announcement in the State Budget to set aside ₹300 crore for a Fund of Funds (FOF) and ₹100 crore for deep tech development has received praises from the industry leaders and experts who feel that these initiatives will go a long way in boosting the start-up ecosystem in clusters such as Mysuru, Mangaluru and Hubballi.
The government plans to introduce the initiatives under the ‘Local Economy Accelerator Programme’ (LEAP) to stimulate innovation and entrepreneurship in cities other than Bengaluru with a grant of ₹1,000 crore. LEAP will aim at creating 5 lakh employment opportunities.
“The thinking that a fund will galvanize more start-ups to come up in clusters beyond Bengaluru is a great idea. Perhaps, a large part of the ₹300 crores FOF will be directed towards these start-ups,” said Madan Padaki, president, TiE Bangalore.
While programmes have already been initiated under ‘Beyond Bengaluru’, the latest announcements come as a booster shot, he said. According to him, the five-year window set by the government also would help to plan long-term and execute efficiently.
“Ecosystems don’t get created overnight. It is the first time a State has adopted a longer-term perspective of this kind,” he said.
‘Good start’
Mohandas Pai, Chairman at Aarin Capital and former CFO at Infosys, lauded the announcements saying that for the first time the Karnataka government made some very serious investment for IT in the budget.
“For a very long time, it has been just pronouncements without money being put behind it. This time there is a clear objective of 5 lakh jobs in the next five years,” he said.
According to him, while the amount is small compared to the investments that come into the State every year, the initiative is a good start and a way to show that the State cared about start-up clusters outside Bengaluru.
Mr. Pai nevertheless suggested that the government could do more.
“It is a ₹4.9 lakh crore budget. But the money being allocated for the sector that contributes to 25% of Karnataka’s GDP is very small. More can be done to create high quality jobs and a better investment climate, and to ensure you create more intellectual property for the future. But this is a good start,” he said.
‘Realistic plan’
Lakshmi Jagannathan, CEO at the Innovation Centre of IIIT-B, suggested that the dedicated corpus will pave the way for start-ups, who are building world-class solutions, to have access to patient capital.
Taslimarif Saiyed, CEO and Director of C-CAMP, termed it a ‘realistic plan.’ He noted that the Fund of Funds, being catalytic in nature, will not only promote deep tech innovations, but will also encourage other funders and VCs to invest in the FOF and thus be a part of the deep tech ecosystem.
Dr. Saiyed also lauded the government’s plan to set up a Centre for Applied AI noting that in a country like India, the opportunities to apply AI in various sectors are abundant. “I think the tone is very right. It’s a very futuristic initiative,” he said.
Published – March 08, 2025 10:28 pm IST
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