New Delhi: State-owned oil companies will soon set up a fund that will finance start-ups based on innovative ideas in the energy sector, oil minister Dharmendra Pradhan said at the Natural Gas Vision 2025 conference organized by the Indian Oil Corp. Ltd (IOC) in New Delhi on Tuesday.

Pradhan said the chiefs of state-run energy firms will take part in the start-up movement in the country, which already has the support of iconic businessmen like Infosys co-founder N.R. Narayana Murthy and chairman emeritus of Tata Sons Ratan Tata. The move is in line with the government’s idea of promoting entrepreneurship, innovation and self employment.

“Indian intellectual capacity is contributing immensely to the global oil and gas economy. We would like the Indian energy market too to benefit from that capacity," Pradhan said, adding that state-run exploration, production, refining and gas infrastructure companies will contribute to the fund. The oil ministry has advised these companies to create a corpus that would be utilized to invest in new businesses with an innovative business model and brings efficiency. Companies will decide how big the fund will be.

“Any start-up needing hand-holding can seek support from the fund. Public sector companies will independently evaluate the commercial viability of the project and take a decision on their equity participation," Pradhan said.

Oil industry leaders welcomed the move. “The minister said this fund would cater to innovation across the entire oil and gas value chain. I guess there will be many takers for it, especially, those who seek to cater to the consumer end of the energy industry," said Ranbir Singh Butola, former chairman of IOC.

Prime Minister Narendra Modi, who announced a start-up initiative last 15 August, announced an action plan on 16 January to promote start-ups. These include setting up a dedicated ₹ 10,000 crore fund, income-tax exemption for the first three years, and a simple exit policy for start-ups.

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