Government to launch Rs. 500 Cr Innovation Fund for Bottom-of-Pyramid Growth


Historically, Indian Government has not been too entrepreneurship friendly. That is one of the main reasons why we still don’t have world class product companies coming out of India.

However, although slowly, things are changing. Government is pushing entrepreneurship. Steps are being taken to make it easier for entrepreneurs to start  their business.

Innovation Fund-001

In yet another another announcement yesterday, Indian Government has proposed to set aside an Innovation Fund targeted at the bottom of socio-economic pyramid, that is expected to boost inclusive economic growth.

This fund will essentially finance projects that come up with innovative solutions to meet the development challenges in India, especially in rural areas.

Size of Government’s Innovation Fund

The Innovation fund will have a minimum size of Rs. 100 crore, out of which GoI will contribute 100 crores and balance will come from scheduled banks, insurance companies, financial institutions, corporates, High Net-worth Individuals (HNIs) as well as bilateral/multilateral institutions.

If the fund is successful, this fund will scale to a size of Rs. 5000 crore.

A trust called, National Innovation Fund Trust, created by Ministry of Micro, Small & Medium Enterprises (MSME) will manage and disburse the funds for accepted innovation projects. Trust will also be responsible for return on investment on the projects that have been invested in.

Will it be successful?

To be honest, your guess is as good as mine. Having said that, I see that there is hope because this innovation fund does not comprise of Government entities alone. As mentioned earlier, Banks, Financial Institutions, HNI’s and others will also be part of the fund making it s Public-Private partnership sort of a fund.

Given that private players will also be part of the trust who will overlook the investments, there is a good chance it will succeed.

What I am extremely happy about is the fact that Government is actively taking steps to boost entrepreneurship in India!

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