An innovation fund of Rs 500 crore has been launched for small entrepreneurs and innovators to help make their ideas into reality.
The Ministry of Micro, Small and Medium Enterprises (MSME) is committing Rs 100 crore and the balance will come from banks, insurance companies, overseas financial and development institutions.
"The fund is about encouraging innovators in MSME sector, to have right ideas for the bottom of the pyramid with focus on affordability, scalability and sustainability. And they need capital to take their ideas into production, to make it a reality," Sam Pitroda, the Chairman of National Innovation Council, said during the launch of the fund here.
The National Innovation Council (NInC) and the ministry have jointly launched the fund -- India Inclusive Innovation Fund (IIIF), which has been approved by the Cabinet.
Pitroda said that lot of young entrepreneurs do not get enough capital to get started and this fund is designed to provide them that kind of capital.
The fund will create new class of capital to help and scale entrepreneurial skills and innovation. It will be registered under Sebi's (Securities and Exchange Board of India) Alternative Investment Fund category with an initial corpus of Rs 500 crore, a statement said.
"The fund endeavour to provide modest financial returns, while ensuring significant social impact. The fund's eventful aim is to expand the corpus to Rs 5,000 crore over the next 24 months," the statement said.
The fund seeks to solve problems of citizens at the base of the economic pyramid, it added.
As per its selection procedure to approve an idea, entrepreneurs will be required to prepare an business plan, apply to the IIIF and give a presentation.
"Ultimately the idea will go to the investment committee. The investment committee will work whether it is worth investing or not," Pitroda said.