India is among the world’s youngest demographics. With the recent trends of innovation and research being promoted indigenously, its time that we give the much-needed boost to the startup industry as well. It is with this sense of duty that the HRD Ministry of India is looking to protect the interest of the country’s youth. The recent initiative of asking higher education institutions to set up budgetary allowances to promote startups by students is one such instance.
This Ministry is divided into the Department of School Education and Literacy and the Department of Higher Education. The prior deals with education spanning from primary to higher secondary alongside literacy. The latter deals with university education and scholarships. It is under these two departments that the main objectives of the Ministry are followed. They formulate the national policy for education, they look into developing the institutions, they pay attention to the minority groups, they provide help in the form of financial aid for scholarships, loans, they talk to international organizations regarding aid in the field of education to name a few.
Now, the department of scholarships, financial aid is something crucial to colleges and universities. Colleges are known to be filled with students who have in the fresh ideas yet more often than not, they don’t have enough financial aid to go through with their ideas. Facebook was a startup that began in a college dorm amongst a couple of college friends. Had Clarium Capital decided not to invest in them, this mammoth company might not have existed. Keeping this in mind, one cannot dissociate financial aid and college startups because the latter cannot exist without the prior. It is this that the HRD Ministry has recently chosen to focus on.
They have proceeded to ask the Higher Education Institutions, to create something known as an ‘innovation fund’. The motto of this fund is obviously to support anything innovative that the students might have thought of and subsequently their startup related ideas.
It was on the 11th of September that these new guidelines were announced by the Ministry of Human Development (HRD). These guidelines required the setting aside of about 1% of the annual budget by these institutions to support these student start-ups. They have further been instructed to raise these funds from as many resources as possible. They can be both government sources or non-government sources. The latter is suggested to reduce the dependency of funding that is public. The institutions in question have also been allowed to get their funding from private as well as corporate players under Corporate Social Responsibility (CSR). Ultimately, the end goal of the policy is to raise as much funding as possible for the maximum amount of student start-ups.
It was under the guidelines of the National Student and Faculty Startup Policy of 2019 that the HRD ministry issued these rules. The framework is something that required a 15 member committee headed by the chairperson Ashok Jhunjunwala (from IIT Madras). The aim they kept in mind was the envisionment of an education system that provides entrepreneurship and startup opportunities to students alongside the faculty.
This policy also requires the institutions to provide their students with facilities known as the ‘incubation’ and ‘pre-incubation’. The guidelines also require these facilities to be made available to the students around-the-clock. These are facilities that act as a crutch for student start-ups who don’t yet know everything surrounding their start-up. They help the companies develop by making services such as management training or technical training available to them so they are equipped for what awaits them outside. For a start-up unaware of all that they will have to face once they get it up and running, these facilities are essential for it to be a long term success and not fizzle out within a couple of months. Moreover, these facilities are to be made available by both the faculty alongside the students of all subjects.
The institutions can take up from around 2% to 9.5% stake or equity in the company in exchange for all these facilities that they are thus making available to their students.
The staff and faculty might take as many numbers of shares as they please as well. Therefore, with that step, procedures such as the development of the products, their subsequent commercialisation, nurturing the student startups under their wings would proceed to fall under the institution’s responsibilities.
The HRIs have also been told to update their internal policies about the faculty members who are involved in the start-up alongside the student entrepreneurs.
Above everything, a healthy work environment needs to be maintained. What pressure can do to a person is vastly known by people across the world. Keeping that in mind, the promotion of a healthy work environment was given foremost importance by the HRD Ministry. They came up with a myriad of regulations to help the students with, starting from attendance relaxation to session breaks etc. Academic credits for the creation of enterprise is also an option. A bunch of regulations such as these to care for the mental health of the students and to ensure that they don’t get overworked have been put in place as well.
Lastly, to regulate these policies, the Atal Ranking of Institutions on Innovation Achievements (ARIA) has also been launched. This will rank universities and colleges based on their activity surrounding the start-ups.
It is rightly stated that students make up the future of a country. It is with these steps that the HRD Ministry has shown the amount of belief they have in that statement and just how seriously they take it. The future of any country will be bright if the students are supported and this policy launched by the HRD Ministry is one that will pave the way for that.