New fund for MSMEs launched
GS Paper - 3 (Economy)
Uttar Pradesh’s ‘One District One Product’ (ODOP) programme will aid in effective identification of “champion sectors” amongst MSMEs under the ‘Ubharte Sitaare Fund’, union finance minister Nirmala Sitharaman said on 21 August 2021 as she launched the “ambitious” alternate investment fund for MSMEs in the state capital.
- The fund, co-sponsored by Exim Bank and Sidbi, was formed as per a 2020 union budget announcement but its launch was delayed due to Covid-19 and ensuing lockdowns over the last and current year.
- With a corpus of Rs 250 crore with a green shoe option of Rs 250 crore, the fund will look at investing in certain identified MSMEs by way of equity and equity-like products to boost presence of such enterprises in the export market.
- Some developed countries like Germany have tried this where they have identified champion sectors and tried to support and handhold them; give them the necessary technology and fund infusion which made a league of a difference for many of these champion sectors. For Ubharte Sitaare, largely the principle is being followed similarly.
- UP has the highest number of MSMEs in the country has facilitated the identification of such “champion” sectors already through its ODOP programme that aims to encourage district-wise specialised products, some which are also GI-tagged, through credit support and marketing assistance.