For those who have the potential to innovate or add value but lack capital to attain commercial success, here’s a government policy that can help you successfully achieve your goals. The Technology Information, Forecasting and Assessment Council (TIFAC) under the Department of Science and Technology (DST), along with the Small Industries Development Bank of India (SIDBI), has a scheme called ‘Srijan’, which aims to boost innovation and create business opportunities for MSMEs.
By Richa Chakravarty
Thursday, Jan 12, 2012: What is the scheme all about?
Due to higher risks involved while investing in unproven technologies, there is a dearth of funding in India for innovations. Identifying the shortage of investments for innovations and to encourage the commercialisation of innovative products and projects by micro, small and medium enterprises (MSMEs), TIFAC, an autonomous organisation under DST, was set up to identify, facilitate and implement technology development projects and processes.
This scheme provides financial assistance to MSMEs, thus opening up opportunities for businesses linked with innovations. For this, TIFAC has created a revolving fund of Rs 300 million for technology innovation and has placed it with SIDBI to provide assistance to MSMEs. The fund will be used to develop, scale up, demonstrate and commercialise innovative technology based projects.
Any Indian MSME unit (new or existing) from any sector can avail financial assistance for up to 80 per cent of the total project cost, which would not be more than Rs 10 million. This scheme also provides developmental loans at flexible terms and lower interest rates to encourage and promote innovative technology.
The benefits
Arranging for funds is one of the biggest hurdles for firms seeking commercial viability of their projects. Srijan not only offers assistance for up to 80 per cent of the total cost of the project but also offers loans at a rate of 5 per cent per annum (with a repayment period of not more than six years from the date of completing the project).
Another major hurdle faced by companies is the upfront cost of a project. Under this scheme, not more than 0.5 per cent of the sanctioned amount plus service tax is applicable as the upfront cost for all sanctioned projects.
“These kinds of policies will definitely help in boosting technological excellence within the country. Such policies should not remain just on paper but also help small companies reap the benefits. There is a huge upfront cost involved in setting up a manufacturing unit. We are capable of manufacturing quality and cost effective products. However, if the right policies are in place, it will help in reducing our huge import bills,” shares Vishal Borker, CEO, NextBit Computing Pvt Ltd.
Obtaining the funds
All that MSMEs seeking financial assistance need to do is send a detailed project proposal either to TIFAC or SIDBI. The project will be evaluated both technically and financially. On evaluating the viability of the project, it will be considered for sanction by a Project Approval Committee (PAC). This committee comprises officials from both SIDBI and TIFAC.
Companies interested in obtaining financial aid can submit their project proposals, the format for which can be downloaded from www.tifac.org.in or www.sidbi.in.
For any further information, companies can contact PR Basak, in-charge, TIFAC-SIDBI Technology Innovation Programme, Technology Information, Forecasting & Assessment Council (TIFAC), ‘A’ Wing, Vishwakarma Bhavan, Shaheed Jeet Singh Marg, New Delhi 110 016; Ph: +91-11-26526926, 42525759; Fax: +91-11-2696 1158, 26863866; [email protected]; or Pushkar Mishra, assistant general manager (Credit) MSME Development Centre, C-11, G block, Bandra Kurla Complex, Bandra (E), Mumbai-400 051; Ph: +91-22-67531367; Fax: +91-22-67531355; [email protected]
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