Financial institutions likely to run corpus to fund hi-tech companies
- The Indian government is set to collaborate with financial institutions such as NaBFID, NIIF, and SIDBI to implement its Budget announcement.
- It announced an allocation of Rs 1 lakh crore corpus for research and innovation in sunrise sectors.
- The funds are intended for financing or refinancing private sector projects dedicated to developing innovative technologies.
Commercial Funding for Innovation
- The government aims to support ventures in specific areas where India can become globally competitive and reduce dependence on importing cutting-edge technologies.
- It will provide cheap financing for innovative projects in sunrise sectors with significant potential.
- The allocated funds are meant for commercial, for-profit ventures focusing on innovative technologies.
Long-Duration Loans and Zero Interest
- The government is considering offering long-duration loans of up to 50 years with zero interest to the financial institutions involved.
- This financial support model is similar to capex for states.
- Financial institutions, in turn, may provide credit at concessional rates to other institutions or directly finance commercial ventures.
Future Prospects
- Discussions are ongoing among various ministries to identify the sectors eligible for funding.
- The success of indigenously developed technologies is expected to create jobs and contribute to making India a world-class economy by 2047.
Prelims Takeaway
- National Bank for Financing Infrastructure and Development (NaBFID)
- Small Industries Development Bank of India (SIDBI)