The proposed Rs 5,500-crore (Rs 55 billion) India Inclusive Innovation Fund, focusing on generating employment and supporting livelihoods across the country through innovative enterprises, is expected to be in place by June.
The Ministry of Micro, Small and Medium Enterprises (MSME) is working on the fund, which will help Indian enterprises in building innovative solutions for developmental challenges."It is in the process and we will send the proposal to the Cabinet for its consideration in the next few days. The fund is expected to be in place in the next two months," an MSME official said.
The fund would be guided by four objectives -- focus on the poor, combine social and commercial returns, drive employment and livelihood generation and help establish a model for wider inclusive innovation funding, he added.
The MSME has taken the initiative in consultation with the National Innovation Council to set up the fund.
The fund would promote innovation, which is aimed at improving the competitiveness and efficiency of small and medium enterprises.
Of the total fund amount, 20 per cenr would come from the government and the remaining from banks, financial institutions and multi-lateral agencies, the official said.
The fund would be in two phases. The first tranche would have a corpus of Rs 500 crore (Rs 5 billion) and in the second phase the amount would be Rs 5,000 crore (Rs 50 billion).
MSMEs face challenges such as lack of access to finance, non-availability of collaterals and delayed realisation of receivables.
There are over 26 million MSMEs in the country that provide employment to around 60 million people.