The Ministry of Communications and Information Technology is considering creating a national venture capital fund to support small and medium enterprises in the IT segment. The fund is to be established by Software Technology Parks of India (STPI) and the Ministry has asked for a grant of Rs. 100 crores for the same. The VC fund would also mobilize resources from state governments and financial institutions.
The proposal has been sent to the Planning Commission for consideration. The initial corpus of the fund will be determined after the partners of the fund are finalized. The proposal comes as a follow up of the success of the Rs. 15 crore-Karnataka Information Technology Venture Capital Fund (KITVEN) created by the Small Industries Development Bank of India (SIDBI) and the Karnataka state government.
Earlier, the Ministry had contributed to the National Venture Fund for Software and IT Industry (NFSIT) set up by the Small Industries Development Bank of India (SIDBI) in 1999. The fund is likely to operate till 2009. NFSIT has invested in 30 small and medium IT enabled and software services and products companies.
Read The Economic Times article.
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