The government today said that a Rs 5,500 crore 'India Inclusive Innovation Fund' is likely be set up by April, with a view to encourage research and development activities in small and medium enterprises.
The Ministry of Micro, Small and Medium Enterprises (MSME), which 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.
"It (Cabinet note) will soon go to the Cabinet for its consideration and the fund is expected to be in place by April," Secretary in MSME Ministry Vivek Rae told reporters on the sidelines of a CII function here.
The scheme would promote innovation which is aimed at improving the competitiveness and efficiency of small and medium enterprises.
Of the total fund amount, 20 per cent funding would come from the government and the remaining 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 the amount would be Rs 5,000 crore," he added.
MSMEs face challenges such as lack of access to finance, non-availability of collaterals and delayed realisation of receivables. There are over 26 million MSMEs in the country that provide employment to around 60 million people.