Tamil Nadu Startup Policy

The prospects for entrepreneurship and employment in the State of Tamil Nadu have become more promising with the introduction of the Tamil Nadu Startup Policy. This pioneering initiative in the State aims to create one lakh jobs by 2023 through the promotion of innovation and entrepreneurial endeavors. In this article, we explore the various facets of the Tamil Nadu Startup Policy in detail.

Objective

The Tamil Nadu Startup Policy is designed to establish at least 5,000 startups, including ten global high-growth ventures in social impact sectors, by the year 2023. The initiative encompasses comprehensive measures for creating, supporting, and nurturing a vibrant startup ecosystem in the State. By involving NRIs from the Tamil diaspora and allocating land on a nominal 99-year lease to establish 'Startup Parks', the policy aims to foster innovation hubs across Tamil Nadu.

Moreover, the scheme plans to provide infrastructure support to strengthen existing frameworks in areas like the Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning (ML), and Software as a Service (SaaS). Through these strategic initiatives, the Government envisions positioning Tamil Nadu as the nation's knowledge capital and a leading innovation hub.

Five-point Action Plan

As part of the scheme, the Tamil Nadu Government has articulated a five-point action plan for implementing these policies. This includes:

The creation of ecosystems to encourage innovations.
Ensuring the availability of resources to the startup ecosystem.
Skill development and job creation initiatives.
Promoting social entrepreneurship ventures.
Establishing global accessibility and partnerships.

Means of Support

In support of the startup framework, the Government is moving towards setting up the Tamil Nadu Startup Fund of Funds (TNSSGF) with a corpus of Rs. 250 crores. TNSSGF will be registered as an Alternative Investment Fund (AIF) and managed by reputed organizations like the Small Industries Development Bank of India (SIDBI). Additionally, the Government intends to establish the Tamil Nadu Startup Seed Grant Fund (TNSSGF) with an exchequer of Rs. 50 crores, allocating Rs. 5 crores for the first year, executed in collaboration with financial institutions and universities.

The State encourages the establishment of corporate and private incubators through CSR funding. These incubators will also serve as innovation sandboxes to tackle challenges faced by PSUs and CPSUs. The Entrepreneurship Development and Innovation Institute of Tamil Nadu (EDII) will act as the nodal agency for the implementation of this policy.

Relaxation Measures

The newly introduced policy offers relaxation for startups concerning criteria such as prior existence, turnover, and Earnest Money Deposit (EMD), among others. These measures are designed to encourage startups to participate in public procurements and bid for smaller-value tenders. Additionally, government departments and undertakings can procure smaller value products from innovative startups at least twice in a financial year.

Grace Marks and Relaxation for Students

The policy's benefits extend to students through special grace marks and attendance relaxation if their project work transitions into a startup incubator. A deferred placement support system is being established in coordination with industries across all colleges to mitigate the risks of unsuccessful student startups.

Qualifying Startups

To be recognized as a startup in Tamil Nadu, an entity must be registered under the Tamil Nadu Startup and Innovation Mission (TANSIM). The date of incorporation should be less than seven years (or ten years for biotechnology, AI, and ML startups), and the turnover must have been less than Rs. 25 crores in each financial year.

Review of Policy

The policy will undergo a review every five years. Amendments to the policy will only be made with the approval of the State cabinet, ensuring that current beneficiaries are not adversely affected. Additionally, the policy will be reviewed biannually by the Tamil Nadu Startup and Innovation Council (TANSIL), based on Key Performance Indicators (KPIs) set by the council.

Explore similar initiatives by checking out the Rajasthan Startup Policy, or learn about the Andhra Pradesh Innovation and Startup Policy. For more specialized approaches, consider looking into the Kerala Student Startup Policy or the Uttarakhand Startup Policy.

Back to Learn

Frequently Asked Questions

Common questions about Tamil Nadu Startup Policy: Innovation & Ecosystem Growth.

The main objective of the Tamil Nadu Startup Policy is to establish at least 5,000 startups, including ten global high-growth ventures in social impact sectors by the year 2023. It aims to create a vibrant startup ecosystem in the state by promoting innovation and entrepreneurial endeavors.

The policy proposes the creation of one lakh jobs within the year 2023 by promoting innovation through entrepreneurial endeavors. It also plans to provide skill development and job creation opportunities as part of its five-point action plan.

The five-point action plan includes the creation of ecosystems for encouraging innovations, ensuring the availability of resources to the Startup Ecosystem, skill development and job creation, promotion of social entrepreneurship, and the establishment of global accessibility and partnerships.

The TNSSGF, with a corpus of Rs. 250 crores, will be registered as an Alternative Investment Fund (AIF) and managed by organizations like the Small Industries Development Bank of India (SIDBI). It will provide financial support to startups in the state.

The TNSSGF, with an exchequer of Rs. 50 crores, will be executed in collaboration with financial institutions and universities. It will provide seed funding to startups in the initial stages of their development.

The policy plans to encourage the establishment of corporate and private incubators through CSR funding. These incubators will also act as innovation sandboxes to address the problems encountered by PSUs and CPSUs.

The policy offers special grace marks and attendance relaxation for students if their project works are converted into a startup in an incubator. It also provides a deferred placement support system across all colleges to cover the risks of failed student startups.

To be recognized as a startup in Tamil Nadu, an entity must be registered under the Tamil Nadu Startup and Innovation Mission (TANSIM). Its date of incorporation must be less than seven years (ten years for biotechnology, AI and ML startups), and its turnover must have been less than Rs. 25 crores in all financial years.

The Tamil Nadu Startup Policy will be reviewed on a five-year period. Additionally, it will be reviewed twice a year by the Tamil Nadu Startup and Innovation Council (TANSIL) based on Key Performance Indicators (KPIs) determined by the council.

The policy renders relaxation for startups in terms of prior existence, turnover criteria, Earnest Money Deposit (EMD), and others. This is aimed at encouraging startups to partake in public procurements and enabling them to bid for smaller-value tenders.