The Department of Telecommunications has asked the Department of Electronics and Information Technology (DeitY) to explain the rationale behind setting up six ‘daughter funds’ under the electronic development fund that intends to promote local research and development (R&D). The proposed electronic development fund policy, which falls under the ambit of DeitY, aims to create a local electronics manufacturing base in the country.
DeitY had proposed that six daughter funds be set up for research and development (R&D), its commercialisation, technology acquisition, early and growth stage activities, in relation to electronics development and manufacturing.
The DoT in turn has proposed that rather than setting up daughter funds for different portions of the value chain, separate funds can be formed for different types of technology such as Nano technology, medical electronics and telecom. This will facilitate development from the R&D stage to growth stage.
DoT?s suggestion is in line with its earlier proposal to set up a Rs 10 billion telecom innovations fund, aimed at providing an impetus to domestic telecom manufacturing and reducing dependence on imported gear. The telecom innovation fund, which may progressively be scaled up to Rs 50 billion will also be aimed at providing seed capital to local telecom start-ups. The fund is proposed to be registered under the Securities and Exchange Board of India’s Alternative Investment Fund (AIF) regulations.
Meanwhile, the telecom department has also opposed formation of a government-backed venture capital fund for activities pertaining to electronic eco-system development as it can be fulfilled by a grant or a loan. It is of the view that having a 100 per cent government-backed fund may deter private participation.
