Backing India's Builders

The idea

Ananya is an engineer in Hyderabad with a working prototype of a new battery. She raises her first round from a venture fund run by seasoned investors. Part of that fund's money came from a national fund of funds, matched by more than two private rupees for every public one. Three years later her company employs four hundred people.

Her first believers were closer to home. Her old maths teacher, her landlord and a few hundred early customers each put a few thousand rupees into the company through a registered crowdfunding portal, and every engineer on her team holds stock options that pay no tax at grant, vesting, exercise or sale. When the company grows, they all grow with it.

I believe public money works best as a catalyst. Placed with independent professionals, with private money alongside and every holding in the open, it builds companies at home and lets every Indian share in their growth. Israel learned this in 1993 with one small fund. We have already learned it ourselves with our first fund of funds. Now we can do it at the scale India deserves.

Why now

Our builders are ready for more capital. Indian tech startups raised $10.5 billion in 2025. A larger national fund can add much of that again.

We know the model works, because we ran it. Our first fund of funds drew ₹2.55 of startup investment for every public rupee.

America, my benchmark for capitalism, shows how deep this can go. US venture firms closed 15,352 deals worth $320 billion in 2025, about 30 times India's total (estimate). Simple crowdfunding, a light route to the public market and stock options every employee can share in are part of what builds that depth, and India can open each of them within 1 year.

And we can do it with care. The new money is ₹15,000 crore of privatisation proceeds (Chapter 12), with no new borrowing and no call on reserves.

The big moves

Here is the path I see, one step after another.

1. First, grow the fund of funds we already have. We add ₹15,000 crore from privatisation proceeds (Chapter 12) to the ₹10,000 crore of Fund of Funds 2.0, run by SIDBI. That gives us a ₹25,000 crore Bharat Growth Fund of Funds, built on a model that has already worked.

2. Next, let professionals pick the companies. The money flows only through SEBI-registered venture funds chosen by open, published scoring. Private investors bring at least 70% of each fund, so public money multiplies private money.

3. Then, aim it at the sectors that build the nation. For example, deep tech and AI, defence (Chapter 17), manufacturing and energy, Indian-first internet (Chapter 25), and bio and space. Each company follows the Chapter 10 ownership rule.

4. At the same time, let every Indian back a builder. On America's model, a startup can raise up to about ₹47 crore a year from anyone through SEBI-registered crowdfunding portals, and a growing company up to about ₹709 crore through a light listing route with a short offer document. With India's three taxes (Chapter 1), stock options carry no tax at grant, vesting, exercise or sale, so every employee can own a share of the upside.

5. Finally, measure ourselves against the best. Each year SIDBI publishes India's venture total beside America's, so everyone can watch the gap close and see which steps help most.

Today vs the new way

Here is how I see the new way comparing with what we do today.

India's builders get far more capital, about 64,000 direct jobs follow (estimate), and every Indian can share in their growth, all paid from sale proceeds and open to public view.

Proof it works

India's first fund of funds delivered. Fund of Funds 1.0 committed ₹10,000 crore to 145 venture funds, which drew over ₹25,500 crore into more than 1,370 startups.

Israel built an industry with one fund. Yozma, launched in 1993, invested about $100 million of public money alongside private partners in ten venture funds. It is widely credited with starting Israel's venture-capital industry.

America lets anyone back a builder. In 2025 US venture firms closed 15,352 deals worth $320 billion. Its securities regulator lets a young company raise up to $5 million a year from the public through registered crowdfunding portals, and up to $75 million through a lighter public offering under Regulation A, so neighbours, customers and employees can own a piece of what they believe in.

What success looks like

• In the first 30 days: Cabinet approves the fund and its charter, SIDBI opens the call for managers, and SEBI publishes draft rules for crowdfunding and the light listing route.
• Within 1 year: all ₹25,000 crore is allocated to ranked managers, and at least ₹12,500 crore is signed with at least 80 venture funds, 20 of them first-time Indian managers.
• Within 1 year: four quarterly audits by the CAG are published and tabled in Parliament.
• Within 1 year: startups raise money from the public through registered crowdfunding portals and a light listing route, and India's yearly venture total is published beside America's.
• After year 1: the full domestic fund is signed by month 24, and returns are judged over 10 years against a target of the 10-year bond yield plus 3 points.

Guardrail ideas

Ideas to start the conversation, for the builders, experts and the public to shape together.

• Investment decisions rest with professionals. Investment committees are made up of independent professionals, with ministers, MPs and MLAs serving the public through oversight in Parliament.
• Every holding is in the open. Every holding and its value is published within 30 days of each quarter-end, with a quarterly CAG audit tabled in Parliament.
• Small investors stay safe as they share in growth. As under US crowdfunding rules, each person's yearly investment in crowdfunded startups is capped by income or net worth, and every raise runs through a registered portal with short, published disclosure.
• Money reaches real companies, fast. A venture fund that has invested less than 20% of its commitments within 12 months, the normal first-year pace, or misses a quarterly report receives no new money, and a fund that misses first close within 6 months passes its place to the next-ranked manager.

FAQs

Q: Will government money be steered to favourites?

A: Every rupee goes where professionals see the best return. Independent SEBI-registered managers are chosen by published scoring, a 5% cap spreads the money, CAG audits run every quarter, and every holding is public.

Q: Does this add to government borrowing?

A: It frees the state to invest without borrowing. The ₹15,000 crore of new money comes from privatisation proceeds (Chapter 12), counted once there, and returns flow back to the Consolidated Fund.

Q: Can employees share in the companies they help build?

A: Yes, simply and fully. With India's three taxes (Chapter 1), a stock option pays no tax when it is granted, vests, is exercised or is sold, so every employee from engineer to office assistant can own a share of the upside, as employees across America do.

The detailed blueprint for this chapter, a starting draft for the mission heads, industry and the private sector to refine, is in the Implementation Annex.