In order to facilitate alternative source of capital for innovation to the industry, with special focus on supporting the Small and Medium Enterprise (SME) sector, the Government is planning the "India Inclusive Innovation Fund", Union Minister of Micro Small & Medium Enterprises (Independent Charge), K.H. Muniyappa informed Wednesday.
"This is the "decade of innovation". Innovation and technology provides comparative advantage to any industrial sector at large and MSME Sector in particular. In this regard, steps are being taken for establishing the "India Inclusive Innovation Fund" to facilitate alternative source of capital like private, equity and venture capital for the knowledge based industries," said Muniyappa in his address at the fourth edition of the Business Today-YES Bank SME awards, presented in New Delhi Wednesday.
This would be a Rs 5000 crore fund, however to begin with, a corpus of Rs. 500 crore would be set aside for the fund of which the government would put in Rs. 100 crore while the balance would be contributed by banks and financial institutions. The scheme, which would be operationalised soon, would take equity stake in companies at the bottom of the pyramid and promote venture capital among MSMEs, a ministry official has informed media.
Expressing his and his government's concerned about the sector, he said, "To productively employ the unemployed youth of the country, the Prime Minister's Employment Generation Programme (PMEGP) offers training and employment opportunity for the unemployed youth and artisans for setting up new enterprises."
"We are also setting up "Advisory Committees" for PMEGP in every district under the Chairmanship of Hon'ble M.P. (Lok Sabha) and various other stakeholders as members to guide and facilitate setting up new PMEGP Units and for employment generation," he added.
Sriprakash Jaiswal, Union Minister of Coal, was chief guest at the function, and K H Muniyappa was the guest of honour.
Complimenting the efforts and outstanding contribution of those MSME enterprises, which have achieved the new levels of excellence in various categories and have won Awards, he said, "This will encourage more such enterprises in SME Sector to reach new heights in terms of quality, innovation and global competitiveness."
Muniyappa dwelt on the crucial role MSMEs played in the economy. He said, MSME Sector is significantly the most crucial link between India's economic growth and socio-economic progress.
This sector contributes towards 9 percent of the countryâ€™s GDP, 45 percent of manufacturing output and about 36 percent of the total exports through its more than 3.6 crore thriving enterprises, employing more than 8 crore persons.