BENGALURU: The finance minister is expected to announce a slew of measures designed to turbo-charge startups, including preferential treatment for government purchases and easier rules to list companies in India when Arun Jaitley unveils the budget on Saturday, according to sources in the government and industry.The Modi administration plans to allocate Rs 2,000 crore as a fund of funds for seed investments in very new startups and increase early-stage funding for intellectual property-centric companies in multiple industries including IT and biotech in a way that the entrepreneur does not have to deal with the government directly.The word ‘startups’ made its way to the budget lexicon only last year and this time the government is keen to move beyond words to deliver policies that will help make India one of the world’s top three startup hubs, the sources said. In doing so India will be emulating a model followed by countries such as Israel and China, where the government is an active supporter of the country’s startups with money and friendly policies.​“A startup fund-of-funds will be most helpful in creating a robust seed funding ecosystem and fueling the much-needed innovation ecosystem,” said Arvind Gupta, the head of the Bharatiya Janata Party 's IT division. “We hope for a significant allocation for software products startups as this sector will have one of the biggest transformational impacts on India’s economy over the next 10-15 years.”In the new economy, India has created at least two companies with valuations in the billions of dollars—Flipkart and Snapdeal—and at least two startups are being created every day. Last year, venture capital funds invested $2 billion (Rs 12,000 crore) in early-stage companies, and this year is expected to dwarf all previous years in terms of the volume and size of venture investments.The government also plans to fund ‘innovation labs’ to spurt the growth of startups across, similar to the large incubators set up at Harvard and Stanford universities. It will open its technology systems or API architecture so that startups can build mobile applications for delivering egovernance services. Technology entrepreneur Amit Ranjan has already been roped in to lead the project.“Such an initiative will result in more product companies and provide ample options to consumers. Better apps mean better service,” said Jay Pullur, founder of Hyderabad-based Pramati Technologies Emphasis will also be on government buying products from Indian software product companies, especially from cyber security firms.“We operate in many countries and India is one few places where the government doesn’t prefer buying software products from its own domestic companies,” said Kailash Katkar, chief executive of Quick Heal Technologies, a Pune-based security software maker which sells its technology in 60 countries.“That this happens in cybersecurity is even more surprising. I’m hopeful that the situation will change soon,” said Katkar.Besides buying the products, government will work with software companies to a create technology platform for small businesses like Kirana stores to go digital.Removal of service tax, excise duty and value-added tax ambiguities on software products is another area of focus for the budget.“As software as a service product player we have been hampered by the lack of clarity on service tax, excise duty and value added tax,” said Girish Rowjee, cofounder of Greytip, a maker of human resources and payroll software that is being used by over 2,000 customers in India including large organisations such as Hero, Volvo, Manipal Hospitals and Dell. “All the confusion stems from not accepting the idea that an intangible item can be a product,” said Rowjee.The government also plans to take steps to reduce the mass exodus of tech startups as an increasing number of young ventures shift overseas in search of investors and a better regulatory environment. It is working on coordinated changes with the Securities and Exchange Board of India, Reserve Bank of India, the tax authorities and ministry of corporate affairs to encourage companies list in India.Sharad Sharma, cofounder of software product think-tank iSpirt said that industry is not asking for sops, but wants problems to be fixed. “There is lot of positive traction,” he said.