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The Union Cabinet has approved the policy for an electronic development fund to invest in electronics and information technology entrepreneurial ventures.
The fund, like a ‘fund of funds’, will invest in companies operating in four areas — electronic system & design, manufacturing, nano-electronics, and information technology. According to a top government official, the professionally managed fund will provide risk capital to companies developing technologies in these areas.
The corpus of this open-ended fund will be managed by Sidbi or a similar financial institution, and the government’s investment will be decided on a case-to-case basis, determined by market dynamics.
“It will act as a catalyst for attracting foreign funds in these companies,” the official said, adding the government investment in these ventures will give assurances to foreign companies.
In the past, Walden International had proposed to set up a $500-million fund to invest in technology ventures. The fund was supposed to have a government stake.
