Startup fund of Rs 10000 crore to come from priority sector shortfall, SIDBI to be custodian

The government on Wednesday said it is giving final touches to the Rs. 10000 crore startup fund, which is expected to be funded by the shortfall in priority sector lending of different banks.

"The current information that we have the basic fund will come from the shortfall in priority sector lending of different banks. This will be credited to the fund for small and medium enterprises. We are in the process of discussions with the Ministry of Finance and SIDBI on how this fund should be structured and it is a work in progress that we hope to complete in a month," said Ministry of Micro, Small and Medium Enterprises, Secretary, Madhav Lal.

The Startup fund was announced in this years Budget and MSME ministry was given the responsibility to work out the contours of the fund.

It is expected that SIDBI would be the custodian of the fund and selection of recipients will be done either through a selection committee or by the Bank itself.

Speaking at the Global SME Business Summit organized by industry chamber CII, Lal added that his ministry is also looking at the structure of a new fund of Rs. 200 crore for technology centre networks, innovation and agro industries.