THE GOVERNMENT IS likely to involve financial institutions including the National Bank for Financing Infrastructure and Development (NaBFID), the National Investment and Infrastructure Fund (NIIF), or the Small Industries Development Bank of India (SIDBI) for operationalising its Budget announcement for extending a Rs 1 lakh crore corpus for research and innovation in sunrise sectors, officials close to the development said.
A combination of one or more than one financial institutions could be considered to provide long-term, concessional credit of Rs 1 lakh crore, staggered over multiple years, for financing or refinancing private sector projects to develop cutting-edge, innovative technologies, the officials said.
“This is commercial funding, for-commercial, for-profit ventures but the venture should be for an innovative, new technology to be proven,” an official told The Indian Express. “In specific areas, there are specific companies which are good; they are globally competitive, yet we often end up importing a lot of cutting-edge technologies because we don’t have our own domestic technologies,” an official said, pointing out the need for such a fund.
The Centre is considering long-duration loans of up to 50 years with zero interest to the financial institution, as it does for capex for states. The institution then, in turn, may consider providing credit at nil or concessional rate to another financial institution for refinancing or directly finance a commercial venture.
With this, the government aims to provide an enabling ecosystem for ventures in cutting-edge, developing technologies to take off.
“It will provide cheap funding for innovative, private sector projects in certain sunrise sectors, where we have a lot of potential,” the official said.
Inter-ministerial deliberations are taking place on the sectors to be considered under this funding. The amount of Rs 1 lakh crore will be spread out over the years for various projects, which may be decided by an expert committee.
On February 1, Union Finance Minister Nirmala Sitharaman while presenting her Budget speech had announced a Rs 1 lakh crore corpus for research and innovation. “For our tech savvy youth, this will be a golden era. A corpus of rupees one lakh crore will be established with a fifty-year interest free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” she said.
The discussions for the research and innovation corpus have taken into account the view that the success rate for some of the projects may not be too high. “It needs a long gestation to prove itself. May not necessarily always succeed also. Not that every new technology succeeds. But some things have a potential for success. So it is intended that this corpus will be made available to a financial institution, probably a government financial institution. The development of such technologies indigenously could result in creation of jobs. “The government is best placed to take this kind of long term risk knowing that some will not pay off but many will. And if they pay off, the payoffs will be very large. And it will help us actually reach a goal of being a world class economy by 2047. This is where that fits in,” the official said.
© The Indian Express Pvt Ltd
First uploaded on: 03-02-2024 at 04:00 IST
