Funding Support & Incentives Made Available to Startups in Kerala as per the Kerala Startup Technology Policy 2014

The Kerala Start Up Technology Policy 2014 aims to bring about a world- class scientific and technology ecosystem which would empower and enable its youth to pursue their dreams within the State.


Here is an overview of the steps that State has taken in terms of offering funding support and incentives:


    • In an unprecedented move, Kerala has become the first and only state to have set aside 1% of the State’s annual budget for entrepreneurship development activities.
    • The Government of Kerala has set up a dedicated Kerala State Innovation Council (KSInC) with the intention of suggesting solutions of holistic development for the State.
    • Back in September 2012, the Hon’ble Chief Minister of Kerala announced the first Student Entrepreneurship Scheme. Then came the IT Policy 2012 for the IT/ITeS sector.Now, the State Government has taken another stride forward with the Innovation &Technology Startup Policy


Some of the key funding support and incentives made available to Startups in Kerala under this policy are as follows:

      • Creating Incubators Both in the virtual and real world, the State Government is entering into Public-Private partnerships to create incubators who would support and mentor start ups. This extends to Educational Institutes and other Centers of Excellence which are in turn again networked through an e-platform to function as a “Virtual Incubator”. This is possible due to an Incubation Infrastructure Development Fund.


    • Core infrastructureThese includeplug and play incubation facilities in different sectors and locations within the state including all Government owned IT Parks, Industrial Parks, SME Clusters and recognised Host Incubators. Fully Furnished and Ready to use, these come with Computers with maximum 2GBPS internet connectivity, Electricity, Water, Security and other office facilities. Common facilities such as testing labs, design studios etc setup by State Government at Nodal Incubators are to be shared. Together facilities would thus range across R&D Labs, Office Spaces, Small and Large Conference Rooms, Small Office Home Offices (SOHO) etc. Additionally, a cloud server in the State Data Centre would be hosted by the government connecting all incubation enters and available to startups at low or nominal costs.



    • Existing schemes dovetailed - Existing schemes under the Central and State Ministries would get dovetailed into sector specific guidelines. For example, the recognised incubators who are availing the Seed Fund Scheme of Government of India will be given matching seed funds to further increase the amounts available for startups by 200%.


Moreover, existing regulations such as building rules, lease details and others are being relaxed to make it more investment friendly for start ups. Besides this, the Government shall support banks, private bodies and financial institutions to offer start up friendly lending schemes.

  • Incentives
    • Startups would be largely exempt from inspections under several Acts and the Rules. Monetary Support from the State for Startups and Incubators come in the shape of
      • The State IT Policy 2012
      • Reimbursement of VAT/CST, Stamp Duty and Registration Fee, Patent Filing Cost
      • Financial Assistance matching grants and Performance Linked Assistance
      • Support to Human Capital Development Programmes
      • Funding Sourced from Corporate Social Responsibility of PSU’s
      • No lease rent or O&M charges if Government buildings are leased until the incubator reaches a point of self-sustainability and reimbursement for rent in private premises.
      • Provision of Investment subsidy of 20% of the value of the Capital Expenditure
      • Training costs to the tuneof Rs 25,000 per employee per year for the first 3 years.

Besides the key highlights provided above, the Policy highlights several other direct and indirect incentives and funding support. Indeed, the State of Kerala is poised to become a serious startup investment paradise in India in the coming year and more.