During last two years, despite umpteen rounds of discussion, it was realized that the new India Inclusive Innovation Fund (IIIF) would only invest in existing companies which were engaged in innovative products and services for serving poor people. No doubt, the poor people need to be served and the for-profit companies already in market need funds for the purpose.
The question really is whether their needs can be met through existing equity funds or commercial banks and if not, why not? Should public funds be used to crowd out the private venture/impact investment funds for the purpose? Interestingly enough, almost the entire money for the purpose has been raised through budgetary provisions and contributions by commercial banks and other public financial institutions.
Assume that this is a worthy cause and the country has enough funds to invest in such companies (either to give a profitable exit option to existing investors who may not be getting sufficient returns or to scale up the investments).
Can one thus argue that the inventors or innovators from professional colleges or other institutions or even unattached individuals with professional degrees or history of experience with organized sector (all the categories which make them ineligible for support from National Innovation Foundation) having a socially relevant proof of concept don’t deserve public support?
If existing companies making profit have difficulty in raising private venture capital (as assumed in IIIF), will start-ups generally run by young people not have even more difficulties? Will the eco-system for innovation really be enriched if companies making profit are given cheap finance but start-ups are left to struggle and die? What kind of compassion and inclusion does such an attitude show towards encouraging creative and socially sensitive youth in an otherwise youthful country? Should the state intervene at the least risky stage of the innovation value chain or at the early stage when private investors will not even touch such ideas.
The fact that hardly any Gandhian Young Technological award winner (see sristi’s techepdia.in/award) could manage to attract private so-called angel fund or risk capital or financial support for taking the proof-of-concept to prototype and prototype to product, and product to utility level shows how serious the situation is.
We all know that deficiency of VIT B12 has become a problem of almost epidemic proportion. The current test not only costs a lot but also takes 24 hours. A young graduate from CFTRI has developed a test which helps in identifying the deficiency in 15 minutes. Does this technology not deserve an urgent support? Is it not relevant particularly for vegetarian people who suffer from this problem more often, particularly among the lower income classes?
If a young student has developed a device which makes the drudgery of coolies at railway stations and elsewhere lesser and improves their efficiency, then should that not be scaled up right away? If a group of students has developed a portable spectrophotometer which can help in testing water quality and mineral composition at low cost, who will invest in their idea? In a country where 60% diseases are water-borne, should innovations by young people even in this space have to wait for years to get any attention?
The youth of this country can easily see the obvious injustice in the policy of denying any funding mechanism for their socially useful ideas for serving poor people. Abortion of majority of the ideasis a great tragedy of our times. I am sure that government is not insensitive to these concerns.
Hopefully sooner than later, an appropriate policy response will emerge. Till then, I am sorry to say that innovative youth have to silently suffer and struggle on their own. Cabinet committee which will process the fund proposal should at least spend five minutes to answer the questions raised here and if they are convinced that the argument made here stands no ground, I suppose young people have to judge alternative ways of articulating their pain. Or wait till better morals prevail. Things will certainly change some day.
The writer is a professor at IIMA.