Govt to float $700 mn fund to invest in software products startups

Govt to float $700 mn fund to invest in software products startups
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The Indian government plans to launch a fund of Rs 5,000 crore ($700 million) to invest in homegrown software products startups.

The Union Cabinet approved the step on Thursday as part of the National Policy on Software Products 2019, which is aimed at substantially increasing India's share in the global software products market by 2025.

The government will set aside Rs 1,500 crore to implement the programmes under the policy over the next seven years. This sum will be allocated between the Software Product Development Fund (SPDF) and a Research & Innovation fund.

Union IT minister Ravi Shankar Prasad said a fifth of the Rs 5,000 crore Software Product Development Fund (SPDF) will come from the government while the rest will come industry.

“The software product ecosystem is characterised by innovations, Intellectual Property (IP) creation and large value addition increase in productivity, which has the potential to significantly boost revenues and exports in the sector, create substantive employment and entrepreneurial opportunities in emerging technologies and leverage opportunities,” read a government statement.

The objectives of this policy will be achieved through specific missions. 

This includes creating 10,000 software product-related startups in Tier-II and Tier-III towns and cities, apart from generating direct and indirect employment for 3.5 million individuals by 2025. 

Besides, a software talent pool will also be created by upskilling around 10 lakh IT professionals.

Additionally, 20 software product development clusters having integrated ICT infrastructure, marketing, incubation, R&D/testbeds and mentoring support will also be created as part of the policy.

A National Software Products Mission will also be set up to monitor and supervise the progress of programmes under this policy. Members of the government, academia and industry will be part of this initiative.