The Planning Commission appointed committee has recommended creation of a Rs. 5000 crore sovereign “Fund of Funds” to aid early stage venture funds. The committee has also suggested creating new source of capital for domestic venture capital. The recommendations of the committee aim to create a vibrant entrepreneurial ecosystem in India.
The committee has clubbed its recommendations under five themes as, catalytic government policy and regulatory framework; easy access to equity capital and debt; businesses as entrepreneurial hubs; promotion of entrepreneurship over careerism; and adequate and effective collaborations forums.
Under the theme of easy access to equity capital and debt, the committee has prescribed creation of a Rs. 5000 crore fund to act as an anchor investor in a number of Alternative Investment Funds (AIFs). These AIFs will raise capital from other sources, both domestic and international, thereby creating a multiplier effect and that could result in capital flow of up to Rs. 25000 crore over the next 10 years.