As the Indian economy grew rapidly over the past 20 years, it generated wealth for its citizens. However, the rapid economic rise has been accompanied by high differential growth in prosperity of the people — as incomes of certain sections have grown much faster compared with others.

While urban India innovated to grow fast, rural India and the sectors that dominate it the most — farm, water, healthcare, rural & cottage industry, and education — have enjoyed limited success.

Such large differential growth normally accentuates tensions within society, and in a democratic set-up, impacts stability and consistent policy making. This is precisely what seems to have happened in India over the past few years.

An immediate remedy to such a malaise is the creation of large social support programmes. India has seen several poverty alleviation measures in recent times, with National Rural Employment Guarantee Scheme (NREGS) taking a lead in blunting tensions created by uneven growth.

However, true solutions lie beyond immediate balms. Tensions can only dissipate over the longer term if growth is accelerated for sectors and sections that were left behind. Science and technology, innovation and entrepreneurship, all of which have played a major role in the rapid growth of modern urban sector, should now focus on these sectors.

Several attempts have been made in this direction over the past few years, including those by Rural Technology and Business Incubator (RTBI) at IIT Madras. But these attempts have been small and somewhat sporadic, with limited policy and venture support.

Over time, the government has realised that innovation in areas such as agriculture, water conservation, rural energy, rural healthcare and education and livelihood would go a long way in strengthening the Indian society.

It has, therefore, decided to provide policy-support to such efforts as well as set up a Rs 5,000 crore public-private venture fund to convert innovation in these areas into drivers of viable commercial enterprises.

These enterprises would attempt to introduce new services and products with venture fund support, promising to bring about a sea change in the lives of the poor. Such strategy could indeed be a gamechanger for the nation.

However, setting up the venture fund can only be a first-step. This alone will not result in a large number of initiatives spawning commercially successful ventures.

At the same time, it must be ensured that the supported enterprises actually attempt to benefit those left behind. With 80 per cent of the capital proposed to be drawn from private venture funds, start-ups must focus on the business end of their ventures to make them commercially viable.

Yet, such businesses must significantly impact the lives of the poor. Substance rather than hype has to be the motto of such an enterprise.

Such ventures cannot be built without careful nurturing and without significant participation from larger sections of the academia and R&D institutions, nor without involving those who have had long and rich experience in working in the social sector.

S&T initiatives must penetrate the grass roots at a much deeper level to solve the problems of the under-privileged. Such efforts will be more complex than what scientists pursue today; and would almost always involve combining expertise in multiple disciplines in addition to taking significant inputs form the social sciences sector.

All this cannot be done overnight and would require sustained efforts, funded by different ministries and lead by the department of science and technology. Such an effort would lay the groundwork for creating ventures that could tap the fund to build successful businesses that benefit the poor.

Fortunately, many youngsters today are excited about working in such sectors and they would certainly tap the fund. However, the next generation is often driven by the hype of “social entrepreneurship” emerging from the west, which rarely goes deep enough.

To succeed, youngsters must have deeper understanding of rural India and sections that have been left behind in our rapid drive to modernise our society and economy. They must understand their strengths and weaknesses, their constraints and their desires. At the same time, they must be willing to think out-of-the-box and innovate to come up with new services and products.

The proposed venture fund is a great step forward for India. Several more steps need to be taken.

(Ashok Jhunjhunwala has been teaching at IIT Madras since 1981 and leads the telecommunications and computer networks group (TeNet), which works with industry in the development of technologies relevant to India, and has incubated 35 companies over the past two decades. A Padma Shri awardee, Jhunjhunwala chairs Rural Technology and Business Incubator (RTBI) at IIT Madras and Mobile Payment Forum of India (MPFI), besides being a member of the prime minister’s scientific advisory committee. He is also on boards of several companies including TTML, Polaris, 3i Infotech, Sasken, Tejas, Tata Communications and Exicom)