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Source: The post is based on the article “Self Reliant India Fund” published in PIB on 27th July 2023
What is the News?
The Minister for Micro Small and Medium Enterprises has informed Lok Sabha about the Self Reliant Fund and the other initiatives taken by the government for the MSME Sector.
What is the Self Reliant India(SRI) Fund?
Self Reliant India Fund was set up in 2021.
It is a Category-II Alternative Investment Fund registered with SEBI.
Aim: To provide growth capital to the deserving and eligible units of the MSME sector.
Size of the fund: The total size of the fund is Rs. 50,000 Crore where Rs.10,000 Crore will come from the Government of India and Rs.40,000 Crore through Private Equity / Venture Capital funds.
Structure of the fund: The Fund is an investment strategy of holding a portfolio of other investment funds, rather than investing directly. In the context of AIFs, a Fund of Fund is an AIF which invests in another AIF.
– Accordingly, SRI Fund will be a combination of Mother/Daughter Funds which will leverage private equity/ other funds and thus will multiply the impact of the initial budgetary infusion.
– The Mother Fund will provide funds only to the Daughter Funds for onward investment as growth capital, while the investment in MSMEs will be done by the Daughter Funds under the Fund.
Implementation: SRI fund is implemented by a special purpose vehicle, NSIC Venture Capital Fund Limited, which is a 100 percent subsidiary of National Small Industries Corporation, a mini-Ratna.
What are the initiatives taken by the government for the MSME Sector?
MSME Champions Scheme: It has been formulated with three components namely, ‘MSME-Sustainable’ (ZED), ‘MSME-Competitive’ (LEAN) and ‘MSME-Innovative’ (Incubation, Design, IPR)
Budget 2023-24 announced the infusion of Rs. 9,000 crore in the corpus of Credit Guarantee Fund Trust for Micro & Small Enterprises to enable an additional credit of Rs. 2.00 Lakh crore with reduced cost of credit.
