• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

New Delhi, Dec 24 The Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the Government should consider earmarking one per cent of the forex reserves (around $1.4 billion) to set up a fund for technological upgradation of the domestic SMEs.

In a representation to the National Manufacturing Competitiveness Council (NMCC), the chamber said that a global technology acquisition fund should be set up for Indian SME manufacturers with funds from the foreign exchange reserves.

“Such a fund would ensure fast track development of technology for domestic SME manufacturers, enabling them to acquire latest technology without getting into the expensive and long process of technology development,” Mr Amit Mitra, General Secretary of FICCI, said in a statement.

If two per cent of SME production is taken as a yardstick for investment in technology, the fund amounts to around Rs 5,500 crore or $1.4 billion, which is less than one per cent of our existing forex reserves, it said adding that the amount could be reviewed by the Government periodically.

“The measure would not only ensure optimal utilisation of the reserves but also help Government tackle the growing problem of forex inflows. The fund would help SME manufacturers acquire know-how, patent and design from universities and research institutes,” the statement said.

The chamber further said a special purpose vehicle can be formed for the fund, which would borrow rupees from the Reserve Bank of India by issuing securities and buy dollars from the bank in the foreign exchange market to lend it to manufacturers.

“Such a mechanism would be inflation and liquidity neutral as it would help in sucking out dollars from the country, thereby easing pressure on the domestic currency,” it added.

Currently, the size of such sovereign funds globally is about $ 2.2-3.2 trillion and this is expected to touch $ 10 trillion in the next ten years, it said.

More Stories on : SSI | Forex | Technology

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
CHEMCON `07 from Dec 27

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line