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Thursday, December 8, 2022

Railway to provide seed funding of Rs 1.5 crore for innovative startups

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According to a strategy paper, the railways will invest in startups to obtain a head start in acquiring ideas straight from them. The policy aims to provide seed funding of up to Rs 1.5 crore for creative technical solutions for the national transporter.

The Indian Railway Innovation Policy would identify and empower Indian innovators to work with the railways to build cost-effective, implementable, scalable solutions and functioning prototypes for the national transporter.

A senior official explained, “Capital inadequacy is a major constraint in the startup ecosystem, particularly at the seed and ‘Proof of Concept’ developmental stages. Hence this policy aims to provide the necessary seed fund support of up to Rs 1.5 crore (on a matching contribution basis) to startups that demonstrate the capability, intent, and promise to produce functional prototypes based on new innovative concepts for potential use by the Indian Railways.”

According to officials, one of the key goals of the strategy would be to utilize new creative technology developed by entrepreneurs and startups to improve operational efficiency and safety on the railway system.

Any Indian firm formed under the Companies Act 1956/2013, primarily micro, small and medium enterprises (MSME) as defined in the MSME Act, 2006, and individual innovators will be eligible organizations or recipients of the funding.

The policy also encourages institutions of research and development to apply for the funding.

The innovators can apply through a special portal that will be opened later this month, and if selected for the grant, its payout will be connected to pre-determined milestones.

The funding mechanism has been set up on a cost-sharing basis, with the Indian Railways and the inventor splitting the costs 50:50. According to officials, the maximum grant amount will be Rs 1.5 crore per inventor, even if the entire project cost surpasses Rs 3 crore.

According to the policy, the innovator will be the exclusive owner of the intellectual property rights developed by the initiative. However, it can be expanded to include any partners as joint owners only with prior approval from the Railway Board, according to officials.

The railways must retain government purpose rights (GPRs), which are an exclusive, transferable, and irrevocable license to utilize intellectual property (IP) for internal consumption or manufacture.

GPRs may be used by railways to manufacture either directly or through subcontractors. In this situation, the government must pay a royalty charge for using GPRs in intellectual property, technology, or a product.

A government official claimed, “With technological innovation becoming increasingly important in the railways, this strategy would imply that we would have entrepreneurs trying to create items specifically for our use. They will be the best and most recent. Both the railways and the innovators benefit from this condition. They will receive the railways as a client while we get the latest technology.”

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