CHANDIGARH: To give further impetus to the start-up ecosystem in the state, the Punjab Cabinet led by Chief Minister Captain Amarinder Singh on Wednesday cleared the decks for the establishment of Punjab Innovation Mission and Punjab Innovation Fund.
To achieve the objective of Punjab Innovative Mission, a Punjab Innovation Fund of Rs.150 crore is proposed to be set up to invest in early-stage start-ups in Punjab. The Government’s participation in this fund will be a maximum of 10% of the Corpus, i.e. Rs. 15 crore. This fund shall be managed by an Asset Management Company, comprising Investors of global repute, and the first chairperson of the Mission and the Fund would be Clix Capital chairman and Genpact founder Pramod Bhasin.
Bhasin told the virtual cabinet meeting that he will raise the remaining Rs.135 crore investment amount from Punjabi business and investors, the diaspora as well as public and private financial institutions.
The Punjab Innovation Mission would go a long way in developing a vibrant innovative ecosystem for entrepreneurship by leveraging capital, policy and technology through collaboration with investors, industry, government, academia and start-ups and by facilitating collaboration amongst the various incubators and accelerators in Punjab, an official spokesperson said after the cabinet meeting.
The two pillars of the Punjab Innovation Mission will be Pollinator (Diaspora Outreach, Challenges/Hackathons, Incubator Trainings, connecting all stakeholders and incubators) and Accelerator (Mentorship and Acceleration of start-ups). While the Mission will be sector agnostic, it will focus on some thrust sectors like Agri-tech, Food Processing, Healthcare, Pharma, Bio-Technology, Life-sciences, IT/ITES, Gaming & Sports, Arts & Entertainment, etc.
The government would support the operation of the Punjab Innovation Mission and Punjab Innovation Fund by providing for the operational expenditure for first three years, amounting to Rs.10 crore. The Mission would be set up at Kalkat Bhawan of Mandi Board at Mohali, where two floors (almost 12000 sq.ft.) will be provided along with access to all its common facilities and shared space, on long-term lease for at least 15 years. This space would be provided free of cost for the first three years. The activities of the Mission would be supported by the Start-up Cell in the Industries and Commerce Department, Invest Punjab and Punjab State Council for Science & Technology.
In order to encourage the participation of private individuals in the Punjab Innovation Fund, the state government has decided to cap its return at 10%. Any return over and above 10% on government’s contribution will be ploughed back into the Punjab Innovation Fund, and will be used to meet the operational expenses of the Fund.
The state government has also decided to guarantee 20% of the principal amount invested by the first five investors into the Punjab Innovation Fund at the end of the Fund’s cycle, to further encourage private investment.
The maximum total cap of this guarantee will be Rs.2 crore per investor, and it will add to a maximum possible liability of Rs.10 crore for the Government. This has been done by the government in recognition of the fact that such investments in start-ups by the Innovation Fund will necessarily be subject to market risks, especially in the early stages of this venture.
Pertinently, the establishment of ‘Punjab Innovation Mission and Punjab Innovation Fund’ was one of the key recommendations of the Group of Experts (GoE) under the chairmanship of Former Deputy Chairperson, Planning Commission of India Montek Singh Ahluwalia. The GoE was constituted by Captain Amarinder Singh to develop a medium-term and long-term post-COVID economic strategy for Punjab with an aim to revitalizing Punjab’s economy through building a strong start-up ecosystem, by supplementing the current government efforts with more private sector led initiatives.
The first chairperson of the Mission and the Fund, Pramod Bhasin, is currently the Chairman of Clix Capital, a financial services business, focused on providing digital platforms and financial services across India. He is also the Chairman of ICRIER, one of India’s foremost Economic Research think tanks. He is also the co-founder of Asha Impact, a virtual social impact investment fund and advocacy platform.
Pramod Bhasin founded Genpact, a NYSE listed company, in 1997 and served as the President and CEO until 2011 and is considered the pioneer of the Business Process Management industry. He led GE Capital in India and Asia, with a 25 year career with GE in the US, UK and Asia. He has also built a Skills business across India. He currently serves on several boards including DLF Ltd, as well as NGOs such as Help Age India, Vishwas and Villageways. Pramod serves as a Strategic Advisor to Kedaara, a Private Equity firm. He was voted IT Man of the Year, and has been the Chairman of Nasscom and TIE-NCR.
With the setting up of Punjab Innovation Mission and Punjab Innovation Fund, Punjab will usher in a new era of sound start-up ecosystem led by private sector initiatives with active support of the state government, added the spokesperson.