The National Innovation Council (NInC) and the Ministry of Micro, Small and Medium Enterprises (MSME) jointly announced the creation of the India Inclusive Innovation Fund (IIIF) here today. IIIF approved by the Union Cabinet seeks to combine innovation and the dynamism of enterprise to solve the problems of citizens at the base of the economic pyramid in India.

Speaking about the Fund, Sam Pitroda, Chairman of NInC and Advisor to the Prime Minister on Public Information, Infrastructure and Innovation said: “The needs of the people at the base of the economic pyramid are today served by philanthropy and Government grants / subsidies which can never be either adequate or scalable. IIIF seeks to leverage the model of Venture Capital to transform the lives of the less privileged”.

The Fund will be registered under SEBI’s Alternative Investment Fund Category I guidelines with an initial corpus of Rs. 500 crores, with the Ministry of MSME committing to 20% (Rs 100 crores) and the balance being given by Banks, insurance companies, overseas financial and development institutions. The Fund will endeavour to provide modest financial returns, while ensuring significant social impact to the community. The Fund’s eventual aim is to expand the corpus to Rs. 5,000 crores over the next 24 months.

Speaking on the occasion the Secretary, MSME, Shri Madhav Lal said that the underline philosophy of the programme is to bring various stakeholders together not only for financing the enterprises but also providing handholding support in different manner through technical inputs to connect with the markets. A number of initiatives will be brought on board and will have a bearing in future on this programme. The Ministry of MSME is very happy on playing an important role, so that programme reaches new heights. The Programme is first of its kind in the country.

The IIIF seeks to create a new class of capital which helps set up and scale entrepreneurial skills and innovation which address the needs of the base of the economic pyramid. The Fund will invest in innovative ventures that are scalable, sustainable and therefore profitable but address social needs of our less privileged citizens in areas such as healthcare, food, nutrition, agriculture, education / skill development, energy, financial inclusion, water, sanitation, employment generation, etc.

Lack of Capital is one of the major reasons why ventures and entrepreneurs seeking to address the needs at the base of the economic pyramid have failed to take off. IIIF seeks to address exactly this gap and therefore at least 50% of its investments initially will be to enterprises that fall in the MSME stage. It has been observed globally that new enterprises have the highest potential for job creation and hence IIIF will seek to address this aspect as well.

The IIIF will also partner the entire ecosystem in this space, including incubators, angel groups, and also public R&D programmes and laboratories to support the commercialisation and deployment of socially relevant innovative technologies and solutions.

The Government will not be involved in the day to day operations of the Fund, which will be entrusted to an Asset Management Company (AMC), set up as a Section 25 not for profit company. The AMC will appoint a professional management team for this purpose as also an Investment Committee comprising professionals of repute, which will take all investment / divestment decisions. A Governing Council comprising government nominees as well as eminent persons from the fields of public service, industry, finance, entrepreneurship, etc. will provide oversight and ensure the Purpose of the Fund is maintained. The AMC will also build a mentoring network, enable incubation and provide training and skills development programmes to entrepreneurs and IIIF assisted companies.

Present on the occasion were Mr. Saurabh Srivastava, Chairman, CA Technologies, Dr. B. K. Gairola, Member Secretary, National Innovation Council and Mission Director, NeGP and other Senior official of the Ministry of MSME and National Innovation Council.