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The Department of Industrial Policy and Promotion (DIPP) has urged the Corporate Affairs Ministry (MCA) to tweak the CSR guidelines to have flexible regime for supporting incubators, said Ramesh Abhishek, DIPP Secretary.
“We have suggested that CSR guidelines should not have stipulations around the location of the incubators. So long as it is an incubator supported by the government, any corporate spend on such incubators should be counted for CSR no matter where the incubator is located,” Abhishek said at Indian Private Equity and Venture Capital Association’s (IVCA) power meet with Preqin, a data provider on alternative assets.
At the event, Preqin’s report on “Preqin Insight: Alternative Assets in India” was launched by Abhishek in the presence of Gopal Srinivasan, Chairman, IVCA, and Marian Rajanathan, Manager-Asian Investor Research, Preqin.
Abhishek said the current CSR guidelines stipulate that only incubators located in government institutions would be eligible for CSR. “We need to move away from this location aspect,” he said.
Simply put, the sole purpose of an incubator is to help entrepreneurs grow their business.
Business incubators are organisations that help speed up the growth of start-up and early stage companies. Incubators solve for start-ups’ problems such as workspace, seed funding, mentoring and training.
The other suggestion from DIPP to MCA is that the current norm requiring only “tech incubators” would qualify for CSR needs to be done away with. “All the incubators should be eligible and not only tech-based one,” said Abhishek.
He also said that India needs more incubators and the current level of about 250 is quite low. “We lack enough incubators. There is need for at least 10 times more incubators.. say, about 2,500 or so,” he said.
Ranking States Abhishek said DIPP would soon embark upon an exercise to rank States on their support to start up ecosystem. Now, as many as 18 States have a start-up policy. It was only about four till few years back.
Credit guarantee scheme Abhishek said that the credit guarantee scheme for start-ups is in the works and the matter is before the Union Cabinet. The idea is to guarantee debts of start-ups up to ₹2 crore.
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