There are multiple reasons for tepid corporate interest in incubators; among them is lack of awareness
There is a list, officially called Schedule VII, which tells companies what they can do under corporate social responsibility (CSR) as prescribed by the Companies Act, 2013. Of the 10 possibilities, from eradicating hunger to promoting education, the penultimate item in that list is funding technology incubators attached to academic institutions. In the first year of implementation, few companies put CSR money into these incubators.
Incubators help start-ups survive in their very early stages when most of them rely on funding from family and friends. Incubators are valuable to start-ups because besides grants, they give them an office to work out of and act as a platform for networking. The grants to fledging start-ups are anywhere between Rs.25 lakh and Rs.50 lakh.
There are about 100 incubators associated with academic institutions and many of them are funded by the department of science and technology (DST), the ministry of micro, small and medium enterprises and the Small Industries Development Bank of India (Sidbi). About 10-12 start-ups are incubated at each of these centres, and they could be involved in developing clean technology, healthcare solutions and creating information technology (IT) innovations.
Among the eight incubators Mint spoke to, five have received CSR funding of under Rs.2 crore in total.
So far, prominent incubators like the one attached to the Indian Institute of Management (IIM) Ahmedabad got a total of Rs.75 lakh from Mahindra and Mahindra Financial Services Ltd, Take Solutions Ltd and Bajaj Electricals Ltd; the ones at Indian Institute of Science (IISc) and Indian Institute of Technology (IIT) Delhi got Rs.50 lakh each from two multinationals under a non-disclosure agreement; IIM Calcutta and BITS Hyderabad received about Rs.5 lakh each from a software company and Sidbi Venture Capital Ltd, a venture fund run by Sidbi, from its own CSR funds.
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