To encourage research and development activities in micro, small and medium enterprise (MSME), the government will set up a Rs 5,500 crore India Inclusive Innovation Fund.
A note on the fund will soon be circulated in the Cabinet for consideration and the fund is expected to be in place by April, secretary MSME Vivek Rae said on Friday.
The Ministry of MSME has taken the initiative in consultation with the National Innovation Council to set up the fund has circulated a cabinet note for consultations to the concerned ministries in this regard.
The secretary said the scheme would promote innovation which is aimed at improving the competitiveness and efficiency of small and medium enterprises.
About 20 per cent of the total fund will be from government while rest of the fund will be from banks, financial institutions and multilateral agencies, Rae said The fund would be in two phases. The first tranche will have a corpus of Rs 500 crore and in the second phase it would `5,000 crore, he said MSMEs are besieged by challenges including lack of access to finance, non-availability of collaterals and delayed realisation of receivables.
India has over 26 million MSMEs that provide employment to around 60 million people.
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