The Central Government has announced on 15 November 2011 formation of a fund, called the India Innovative Inclusion Fund (“IIIF”) that would promote low cost innovation for the masses. The National Innovation Council (“NIC”), set up under Mr. Sam Pitroda last year, suggested formation of IIIF in order to promote inclusive innovation.
The intention behind setting up the fund is to encourage ideas and innovations for areas like poverty alleviation, health, rural communications, agriculture, animal husbandry and green energy, thereby enabling and empowering the poor. It is expected to facilitate the unorganized sector, which employs the majority of Indian workforce, and raise the productivity and existing skill set.
The formation of such a fund was mooted to fund grass root innovations which does not get much support from venture capital, thereby necessitating contribution by the Government. This fund would be utilized to promote entrepreneurs and inventors developing products and solutions for customers who lie in the “bottom 500 million” of the Indian population. The Fund will focus on providing risk capital funding to enterprises that create and deliver technologies and solutions aimed at enhancing the quality of life at the Bottom of the Pyramid; and – subject to applicable law – work with other funds with objectives similar to its own. The Fund will support investment at different stages of the enterprise development cycle – from early stages, through later phases of scaling-up of potentially successful solutions and business models.
NIC would start operating IIIF by creating an initial corpus of Rs. 500 crore, out of which Rs. 100 crore would be infused by the Government. Over a period of time a corpus of about Rs. 5000 crore is expected to be developed for IIIF. IIIF would operate as a ‘for profit’ entity with focus on social investment and development of low-cost innovations.
The IIIF will also explore the possibility of establishing ‘soft’ incubation capacity and resources – expertise and programmes that will support individual entrepreneurs and start-up companies
Further details about IIIF is available at http://www.innovationcouncil.gov.in/index.php?option=com_content&view=article&id=52&Itemid=34
We consider this an interesting development which will make funds available to entrepreneurs concentrating on social enterprises and the rural sector. We will be following developments in this respect very keenly.