New Delhi: India’s ministry of information technology is working on two schemes to increase interaction between industry and top educational institutions such as the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) and help these institutions scale up start-ups incubated by them in an effort to bridge the gap between academic research and commercial use of technology.
While the so-called Multiplier Grants scheme, or Srrijan: Prithvi, aims to increase collaboration between industry and academia, the Technology Incubation and Development of Entrepreneurs (TIDE) scheme aims to help foster entrepreneurship in institutes such as IITs and IIMs. Both are part of a larger hardware manufacturing policy the ministry is working on that will push India’s cause as a hardware hub. Research, especially of the sort that can be successfully taken to market, is a key constituent of the manufacturing ecosystem.
Last week, the government approved the creation of information technology investment regions, or ITIRs, that are meant to be dedicated electronics clusters. In November, the ministry of information technology had announced the “Support International Patent Protection in Electronics and IT (SIP-EIT)” programme under which small and medium enterprises and start-ups in the IT business will be reimbursed costs incurred in filing international patent applications.
Strategic collaborations: IIT-Delhi campus. A new scheme aims to nurture incubation in institutes such as IITs and IIMs. (Photo: Harikrishna Katragadda/ Mint)
“TIDE has been internally approved by the ministry of information technology and will be launched for premier institutes later this month and the Multiplier Grants scheme is in the process of going through internal approvals and will be ready within a couple of months,” said a senior government official who did not want to be identified.
In the Multiplier Grants scheme, the government commits double the amount committed by a company for a research project in a educational institute, thereby absorbing the bulk of the risk involved in research and development.
However, under the terms of the scheme, the proposal should come from the company or a consortium of companies and must be submitted to the government along with an institution. The government’s grant under the scheme is capped at Rs2 crore over two years when one company is involved and Rs4 crore over three years when a consortium is involved.
TIDE seeks to promote product-oriented research, and each educational institute will be given financial support of up to Rs1.55 crore payable in instalments. Of this, Rs30 lakh can be utilized by the institute’s incubation centre to improve infrastructure and Rs1.25 crore be shared among various start-ups with each getting a maximum of Rs25 lakh.
The founder of one company that was incubated at IIT-Delhi said the money would help.
“Marketing is a bit of a problem both in terms of finances and competence and we don’t know how to go about it, so this scheme will be helpful. However, Rs25 lakh per company is okay but not enough. One needs at least Rs70-80 lakh to do a decent marketing pitch, but that again depends on each product,” said Shishir Kumar Gupta, chief executive officer of Mechartés Researchers Pvt. Ltd, a company that was incubated at IIT-Delhi for three years and will move out of campus in August. Mechartes designs earthquake-proof buildings and also optimizes ventilation and air circulation services in buildings.
“This scheme is to strengthen existing centres and the funding is to enable incubated companies to take their products to the market. IIM-Bangalore, Indian Institute of Information Technology, or IIIT, Hyderabad and IIIT-Allahabad have already contacted us for this scheme,” the official said. This scheme will cover 15 institutes. Between them, the seven IITs are incubating between 25 and 30 companies.
VirtualWire Technologies Pvt. Ltd, a company that operates in the area of wireless data that was incubated at IIT-Delhi and has moved out of campus, received funding around 10 months back for the research and development of its so-called ultrawide bandchip for short-range wireless applications for personal computers and laptops, from the Council of Scientific and Industrial research (CSIR) under its New Millennium Indian Technology Leadership Initiative, or NMITLI. “The total cost of our project is Rs15 crore, and CSIR has funded less than half of that amount. We cannot reveal the exact amount but the CSIR fund varies from project to project,” said Vishal Chandra, chief executive officer of VirtualWire Technologies.
According to Chandra, there are just three government schemes that really benefit start-ups such as his. CSIR’s scheme; the ‘Support International Patent Protection in Electronics and IT (SIP-EIT)’ scheme announced by the ministry last year; and the financial assistance provided by the Technology Development Board (TDB) constituted by the government in 1996 as a statutory body under the department of science and technology.
“A scheme like TIDE is more than enough for software production targeted only at the Indian market. But, if you are developing a capital-intensive product, then Rs25 lakh is nothing. You should then go to the TDB which provides financial assistance in crores,” Chandra said.
However, the government official said that the cap on TIDE funds could be reviewed. “If we get a good response, we will increase the amount of our grants.”