Union commerce minister Piyush Goyal on Monday formally unveiled a Startup India Seed Fund Scheme (SISFS) to handhold and financially support early-stage startups across 300 incubation centres, almost three months after the Centre announced the plan.

According to the commerce ministry, the fund is expected to benefit around 3,600 startups and boost the startup ecosystem, particularly in tier-2 and 3 cities. The fund aims to provide financial assistance to startups for proof of concept, prototype development, product trials and market entry. A sum of ₹945 crore has been allocated for the fund.

Goyal said the SISFS will “secure seed funding, inspire innovation, support transformative ideas, facilitate implementation and start a startup revolution”. He said the scheme will create a robust startup ecosystem, particularly in non-metros, “which are often deprived of adequate funding”. The minister said he would like to encourage innovators from rural areas to come forward and benefit from this scheme.

Grants of up to ₹5 crore shall be provided to eligible incubators selected by an expert committee. They shall be offered grants of up to ₹20 lakh for validation of proof of concept, prototype development or product trials. Furthermore, investments of up to ₹50 lakh shall be provided to startups for market entry, commercialization or scaling up through convertible debentures or debt-linked instruments.

Goyal said this scheme is being launched within three months of its announcement by Prime Minister Narendra Modi and underlined that the “times are tough, but our resolve is strong, and never before has it become more important for us to empower our startups”.

In January, at the Startup India’s international summit, ‘Prarambh’, PM Modi had said that his government is trying to “create a startup system, which is based on the mantra ‘of the youth, by the youth, for the youth’.”