- Atal Incubation Centres were meant to provide funding, mentorship, and infrastructure for India’s burgeoning innovation economy—but most leave founders stranded after the first grant
- At most of the 72 AICs the trend is visible: no audits, very little support after disbursing the grants, and a follow-on funding rate of under 5%
- Most AICs stall after the prototype stage, offering little support for scale or market-readiness
- The central and state governments are doubling down on funding for the same model, essentially pouring up to Rs 3,800 crore in a machine that only slightly works
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Farha should be making a pitch deck. Or testing a prototype. Or networking with VCs. Instead, she is worrying. Mostly about how to make money stretch for a startup that, on paper, has already received a government grant.
Her 12-month-old women’s health platform was accepted into one of India’s flagship Atal Incubation Centres (AICs)—the kind that aim to nurture innovation and entrepreneurship in India with sanctioned grants, formal mentors, and built-in support. At least, that’s what they’re supposed to do.
But Farha’s struggles aren’t at the cutting edge. They’re on the ground floor: hiring, outreach, marketing. Work at the founder’s office leaves her with no room to think and absolutely no time to raise external funding.
“The grant only covers the tech aspect of my startup. I have to invest my own money into everything else,” said the 36-year-old founder.
Building a tech platform was necessary, of course. But it was only one part of Farha’s vision. The bigger goal was to fend for the community. And the startup needed traction to work. It needed buzz, visibility, and conversation.
“One would think a startup-focused programme, with all its talk of mentorship and expansion, might have understood that,” she said.
Spoiler: it doesn’t.
Launched in 2016 and created with a Rs 500 crore corpus, Atal Incubation Centres, functioning under the country’s apex policy think tank Niti Aayog’s Atal Innovation Mission (AIM), had a simple promise—nurture India’s innovators. These centres were meant to be the backbone of the government’s innovation push.
Instead, after nearly a decade of incubating over 3,500 startups across 72 AICs in the country, fewer than 5% of the companies have raised external capital, according to data from various government sources. Most centres, in fact, show no visible activity, outcomes, or meaningful audits.
Now, the government wants to “expand, strengthen, and deepen” the ecosystem, and so it has
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