Chennai, April 18 (KNN) Tamil Nadu Government is planning to set up a Rs 500 crore venture capital fund which would be managed by industry experts, said a senior official from the state MSME Department.

Mangat Ram Sharma, Principal Secretary, Department of MSME, Tamil Nadu said that during discussions with stakeholders on the government-sponsored VC fund, concerns were raised on whether the government should run it.

He was speaking at CII Startupreneurs 2017, a conference organized for start-ups.

The State government will provide money for the fund, which can start with Rs 50 crore or Rs 100 crore and gradually increase it to Rs 500 crore, he added.

“We don’t want to manage the fund as we are too conservative and cannot run it. We want it to be managed by professionals,” he said.

Sharma said a global annual sourcing fair on the scale of the Global Investors Meet is being planned to be held in Chennai to provide both domestic and international companies a platform. The department will spend Rs 10 crore a year on this, he said.

Meanwhile, Gopal Srinivasan, CMD, TVS Capital Funds Ltd, urged the government to formulate a start-up policy. There are nearly four lakh IT employees in Chennai, and every year the amount of private equity that flows into the city is the highest in South India, he said.

The same talent and attractiveness of Chennai can be leveraged with a good start-up policy, like what Telengana has done, Srinivasan said.

Arun Jain, Chairman and Managing Director, Intellect Design Arena, said the start-up ecosystem that began three-fours years ago is similar to the 1991 liberalisation. There is no connection between entrepreneurship and VC funding.

In 1991, the STPI policy came out but for the first five years, it was below the surface. However, it paved the way for the industry to become a USD 100 billion in 2007, he said.