MoS Sinha bats for domestic VC funds

In order to finance social innovation in the country, the government is trying to create a domestic venture capital industry, which can ensure greater fund flow towards development initiatives, and in turn lead to creation of jobs, Minister of State for Finance Jayant Sinha said on Monday.

Venture capital is financial capital provided to early-stage, high-potential, growth startup companies.

“The first and foremost challenge that India faces is jobs. If we don’t create jobs, we have whole generation which would be jobless. Jobs are our single biggest challenge,” Sinha said.

He said, of 12 million people entering the workforce every year, only 1 million-2 million are in the organised sector, implying that the government needed to create more jobs in the unorganised sector.

“There is a massive gap... we have to create jobs,” he said. “One thing that we are trying to do is to create a domestic venture capital industry that will also be able to provide funding for impact funds,” Sinha said here, adding that there could be announcements soon in this area.

On other sources of fund to businesses, especially the startups, Sinha said that the 2 per cent allocation of net profit made by the corporate sector made mandatory in the new Companies Act for CSR is expected to provide huge sums for various sectors.