The Venture Capital Fund for MSMEs will receive its funding in the form of loans from RBI, based on shortfalls in priority sector lending, it added.

However, the government is yet to appoint the panel for examining the financial architecture for the micro, small & medium enterprises (MSME) sector, which was announced in the budget. The MSME Ministry has proposed to its Finance counterpart the composition of the Committee.

"The Committee has to be set up by Finance. We cannot appoint Reserve Bank representative, we cannot appoint Finance. We suggested a particular composition, and we expect that it will be set up shortly," Lal said.

"I propose to appoint a committee with representatives from the Finance Ministry, Ministry of MSME, RBI to give concrete suggestions in three months," Finance Minister Arun Jaitley had said while presenting the Union Budget earlier.

Besides, the government said it hopes to finalise a scheme by the first week of October on the budget proposal to set up a fund with a corpus of Rs 200 crore to establish a technology centre network to promote innovation, entrepreneurship and agro-industry.

"The Ministry also had detailed consultations with different Ministries and Departments namely, Ministries of Food Processing Industries, Textiles, Science & Technology, Rural Development, Bio Technology, Agriculture and Department of Electronics and Information Technology to operationalise a Rs 200 crore Fund for Technology Centre Network, Innovation, Entrepreneurship and Agro Industries.

"Since no specific allocation has been made for the District Incubation Centers, we propose to include the same in this Fund itself. We hope that we would be able to finalize the scheme by the first week of October 2014," the MSME Ministry said.

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