The Telangana Budget for the fiscal year 2025-26 is set to be unveiled in the second week of March, with a significant announcement regarding the creation of a Fund of Funds aimed at supporting start-ups. The government is expected to adopt a facilitative role, rather than being a major contributor to this fund.
According to sources within the Telangana Government, their approach will be to facilitate the establishment of this fund without becoming the primary investor. T-Hub, the state-sponsored start-up incubator, will be designated to oversee the management of the fund.
While the Fund of Funds will promote a wide range of sectors, there will be a particular emphasis on deep tech start-ups, especially those focused on artificial intelligence. Additionally, healthcare start-ups that integrate AI in their solutions will also receive focused support.
Previously, under the Telangana Rashtra Samithi (TRS) administration, a ₹2,000-crore Fund of Funds was announced to bolster the start-up ecosystem. As part of the State Innovation Policy established in 2016, the government proposed setting up several funds, including one aimed at early-stage start-ups.
A significant barrier for many start-ups is the lack of funding necessary to turn ideas into reality. Many innovative concepts fail to progress beyond the conceptual stage due to financial constraints. The government aims to alleviate this issue through its upcoming funding initiative, as outlined in the policy document.
To launch the fund, the government plans to engage global investors and involve T-Hub alongside its Board of Directors, corporate networks, and senior officials in the implementation process. However, previous attempts have met with challenges and have not materialized even after the TRS retained power in 2019.
Now, the Congress Government has decided to proceed with the fund’s launch but appears to be limiting its direct financial involvement. Sources suggest that the government intends to primarily facilitate participation from other funding firms rather than contribute significantly itself.
