Gross Expenditure on Research and Development (GERD) as a percentage share of GDP has remained at 0.7 per cent in India during the last few years.
This figure is lower when compared to the GERD of many other countries, including Israel, South Korea, the US, Japan and Germany, among others.
This is significant as Prime Minister Narendra Modi on his Independence Day speech called for push into research and innovation.
While addressing the nation, Modi added ‘Jai Anusandhan’ (research, innovation) to the ‘Jai Jawan, Jai Kisan, and Jai Vigyan’ slogan used by the political leaders in the past.
A recent reply by the Ministry of Science and Technology in the Parliament said that GERD as a percentage share of GDP has remained at 0.7 per cent during the last few years due to inadequate private sector investment.
The corresponding GERD to GDP figures for some developed and developing countries are — Israel (5.4 per cent), South Korea (4.8 per cent), the US (3.5 per cent), Japan (3.3 per cent), Germany (3.1 per cent), France (2.4 per cent), China (2.4 per cent), the UK (1.7 per cent), Canada (1.7 per cent), Brazil (1.2 per cent), Russia (1.1 per cent) and South Africa (0.6 per cent).
As per the government reply, in absolute terms India’s GERD has been continuously increasing over the years and has been increased by three times in the last 10 years.
“As per the latest available R&D statistics, the national expenditure on research and development measured in terms of GERD during the years 2015-16 to 2017-18 was Rs 95,452.44 crore, Rs 103,099.26 crore and Rs 113,825.03 crore, respectively. It is estimated to be of the order of Rs 123,847.71 crore for 2018-19,” the government said.
The government has taken several steps to enhance R&D spending and attract private sector investment in R&D. Some of the key efforts include the successive increase in plan allocations for scientific departments, incentivising investment by private sector to increase their share in GERD, improving the ease of doing business in the Science, Technology and Innovation (STI) activities, introducing flexible tools for public procurement, creating avenues for collaborative STI funding through portfolio-based funding mechanisms such as public-private-partnerships and other innovative hybrid funding mechanisms.
Moreover, the government has allowed the corporate sector to make R&D investments under the provision of corporate social responsibility (CSR).
Corporates can invest in technology business incubators or contribute in research efforts carried out by institutions and national research laboratories as a part of their CSR.
There are also specific investment incentives offered, such as location-based tax incentives that enables 100 per cent deduction of profits generated from establishing and doing business in the northeastern states, said the government’s written reply.