Running head: DOES INDIA NEED MOR R&D FOR FUTURE?

Does India need more R&D for future?

Barnika Bhuyan
DOES INDIA NEED MOR R&D FOR FUTURE? 2

Table of Contents

Abstract...............................................................................................................................3

Does India need more R&D for future?..............................................................................4

Need for R&D?....................................................................................................................4

Consolidating diverse actors ...............................................................................................5

Future for R&D………………………………………………………. ……………………………………………………10

Social Science and R&D………………………………………………………………………………………………..12

Way forward: Prioritizing sectors………………………………………………………………………………….14

References……………………………………………………………………………………………………………………17
DOES INDIA NEED MOR R&D FOR FUTURE? 3

Abstract

The importance of research in steering a country’s progress is second to

none. It’s on similar lines the question that is being raised is does India need more

R&D for future ? The straightforward answer is yes. However we need to

prioritize the sectors which need urgent attention and can foster in concrete

changes. While we focus on short term goals it’s equally important to pave the path

for future aspirations . With the twin problem of lack of infrastructure and

resources R&D investments suffer. It's must be understood that the field of R&D

is a self serving loop after the initial investment is met. According to latest Global

Innovation Index India has improved it’s ranking from 57 to 52 which is a step in

the right direction. Also the focus should be to consolidate diverse actors to foster

in R&D investments. Finally the importance of R&D in social science must be

realized as it can prove beneficial for India’s growth story.

Keywords: R&D GDP Make in India Start-ups Smart city

DOES INDIA NEED MOR R&D FOR FUTURE? 4

Does India need more R&D for future?

The latest report titled "Research and Development Expenditure Ecosystem"

by Economic Advisory Council to the PM highlights that 2% of GDP must be

spent for R&D by 2022. It's found that the private sector investment in the field is

not commensurate with reports from developed countries. The major stimulus still

continues to be made by the central government. Thus the issue arises as to why

investment in R&D is important ? After establishing the importance it must be

noted that a conducive atmosphere for growth of R&D continues to be a

challenge .

Need for R&D

R&D is the first step towards understanding the mood of the market. It

allows to gauge the need and aspirations of the consumer thus paving way for a

successful market driven economy. Nokia has expanded its R&D projects in

Bengaluru. It now has a renewed focus on areas like cloud, big data analytics, 5G

technology etc. It also has a 5G/IoT lab with the aim of finding novel solutions to

smart cities. The buzzword 'innovation' as a result of effective research and

Development can actually helps India tackle a lot of its unique challenges.

Recently Indian Institute of Technology Mahdi, Himachal Pradesh developed an

effective landslide alert system. As is evident from the cases of devastating

DOES INDIA NEED MOR R&D FOR FUTURE? 5

landslide at Kedarnath in 2013 , an early warning system is a major step towards

averting such disaster. Hence apart from the obvious good economics of R&D it is

also helpful in finding solutions to systemic problems. with the rapid development

of technology and the sheer scale of schemes like Digital India it is important to

keep a tab on cyber security. University of Alabama suggests that brainwave

sensing headsets can be used to guess passwords hence posing new threats. Lastly

one of the major incentives to push for R&D is because of its ability to ‘create and

maintain jobs as stated by FICCI in it’s reports. India also suffers from educated

unemployment where graduates don’t find jobs commensurate to their skill level

and knowledge base .

Consolidating diverse actors

Efforts are being made to push R&D investments by private players. Since

the current data reflects that the disproportionate share of investment is being made

by Central government, a climate for consolidating diverse actors is needed. It’s for

this purpose various incentive schemes are being pushed which can attract private

players and decentralized state governments. The Gross Expenditure on R&D as a

percentage share of Indian GDP is 0.7%. Reports indicate that this is far lower as

compared to Brazil and1.3% and Russia.

DOES INDIA NEED MOR R&D FOR FUTURE? 6

To foster in private sector FICCI in it’s latest report suggests that knowledge

and incubation centers must be developed. It highlights how collaboration with

countries that are already ‘trailblazer’ in R&D can prove effective. It also shows

the importance of creating an atmosphere for private sector investment by

providing SEZ. The need for adequate funding of start-ups can be met with

greater FDI . This along with structural changes like creating specialized

universities can prove helpful .Also when one is focusing on the private sector it

‘important to harness the potential of CSR (corporate social responsibility ). A

decentralized initiative wherein state governments also promote R&D is a need of

the hour. State government in Assam have attempted to find solutions to the

problems of flood and also increase productivity of Muga silk.

With the consolidation of different actors it's then important to facilitate the

conditions for R&D. For this numerous schemes have been initiated. According to

the Centre for Technology Innovation and Education Research some noteworthy

initiatives are-

1.Department of Biotechnology(DBT) - Contract Research Scheme

The Contract Research scheme aims to foster collaboration between academia and

industry by enabling the validation of biotechnology academic research that has

commercialization potential. It aims to do this by funding projects that involve

DOES INDIA NEED MOR R&D FOR FUTURE? 7

participants from academia and the contract research and manufacturing industry.

The scheme supports 100% of the project costs and is given over installments.
DOES INDIA NEED MOR R&D FOR FUTURE? 8

2.Department of Electronics and Information Technology (DeitY) - R&D Funding

Scheme Grants-in-aid are available from DeitY for undertaking research

projects relevant to electronics and Information Technology. The amounts vary

depending on the projects.

3. Ministry of New and Renewable Energy- R&D for solar photovoltaic

technology and solar thermal technology programme The R&D in SPV and ST

programme aims to focus on development of renewable energy for meeting the

energy needs of the country. Projects that involve private sectors are awarded upto

50% of project cost

4.Council for Scientific and Industrial Research CSIR- Expert /Scientist are

eligible for grant stipend of 30,000 rupees per month as a research fellowship.

5.Department of science and technology- Global Innovation and technology

alliance In order to facilitate collaborative activities between countries, GITA

offers soft loans and grants for joint R&D efforts to the Indian applicant.

Researchers and managers representing Indian companies are eligible for

participation in partnership with a counterpart company from certain countries.

The government has also announced (CITER

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 100% write off of revenue and capital expenditure on R&D

 100% write off of capital expenditure on R&D

 Weighted tax deduction @175% for sponsored research

programme in approved National Laboratories, Universities, and IITs U/s 35

(2AA) of IT ACT 1961

 Weighted tax deduction @175% for any sum paid to research

associations (SIRO) U/s 35 (1) (ii) of IT ACT 1961

 Weighted tax deduction @ 200% on R&D expenditure to

companies U/s 35(2AB) of IT ACT 1961

 IT exemption @125% on donations to research institutions

engaged in social science & statistical research U/s 35 (1)(iii) of IT ACT

1961

 Accelerated depreciation allowance at 40% for investment on plant

& machinery, made on the basis of indigenous technology as against 15%

for normal depreciation as per rule 5(2) of IT rules

 Customs & central excise duty exemption to In-house R&D units

of industry, SIROs for capital equipment & consumables needed for R&D.

 Excise duty waiver for 3 years on goods designed & developed by

a wholly owned Indian company and patented in any two countries out of:

India, USA, Japan and any one country of

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European Union( to be viewed in relation with the GST regime).

 Exemption from customs duty on imports made for R&D projects

funded by Government in industry.

Keeping with the spirit of SDG 9

A functioning and resilient infrastructure is the foundation of

every successful community. To meet future challenges, our

industries and infrastructure must be upgraded. For this, we need to

promote innovative sustainable technologies and ensure equal and

universal access to information and financial markets. This will bring

prosperity, create jobs and make sure that we build stable and

prosperous societies across the globe.

and global intellectual property rights India with the National IPR Policy

2016 has taken a step in the right direction. The motto of "creative India;

Innovative India" sets the tune for developing a healthy culture of R&D. In terms

of administrative efficiency a single nodal agency called as Department of

Industrial Policy and Promotion coordinates, guides and implements future of IPR.

The vision of this policy is as follows

An India where creativity and innovation are stimulated by

Intellectual Property for the benefit of all; an India where intellectual

DOES INDIA NEED MOR R&D FOR FUTURE? 11

property promotes advancement in science and technology, arts and

culture, traditional knowledge and biodiversity resources; an India

where knowledge is the main driver of development, and knowledge

owned is transformed into knowledge shared’. While, the stated

mission of the policy is: ‘Stimulate a dynamic, vibrant and balanced

intellectual property rights system in India to: (a) foster creativity and

innovation and thereby, promote entrepreneurship and enhance socio-

economic and cultural development, and (b) focus on enhancing

access to healthcare, food security and environmental protection,

among other sectors of vital social, economic and technological

importance.

Future for R&D in India

It's important that India realizes the potential of R&D. An extensive skill

base and a population proficient in English has allowed India to emerge as an R&D

hub for many foreign companies. Also with schemes like Make In India, Smart city

and Start-up India, R&D have a significant role to play .

The Make In India Initiative aspires to put India in the global map of

manufacturing. With the aims of self sufficiency and home grown products it can
DOES INDIA NEED MOR R&D FOR FUTURE? 12

go a long way in boosting India’s economic potential. The draft policy for Defence

sector states

“The Ministry of Defense can increase the share of spending on defence

R&D and involve the private sector in related efforts. This could be done through

open competitive bidding and involving the industry and academia as partners to

DRDO (Defense Research and Development Organization)”.

The FICCI and Edelman report talks about the potential of R&D in the smart city project. It

mentions about the M2M (Machine- to- Machine Technology) which allows interconnected

devices to operate. The smart grids, sensor and monitors are able to function

because of this. The R&D efforts are also required to find novel solution to

infrastructure problems and disaster management as well. As stated in the report

Today, buildings in India account for nearly 40% of the total energy

consumption, which will reach 50% by 2030. McKinsey estimated in India

that 700 million to 900 million square meters of new residential and

commercial space would need to be built every year from 2010 to 2020.

Increase in energy consumption will be tackled when buildings are outfitted

with intelligent sensors and networked management systems collect and

analyze energy-use data. Reducing traffic congestion will also need a new

and innovative approach in smart cities.

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It’s in this context that the scheme start-up India us equally important. India has

emerged as the start-up hub because of its potential and resources. However even

with the abundance of human capital it’s found because of poor R&D there haven’t

been major breakthrough start-ups. Also linked to this is the factor of affordability

of products and services. Thus the research should be oriented to understand needs

of the customer and fund innovative solutions.

“Aspire- A scheme for promotion of innovation , rural industries and

entrepreneurship- was launched by Ministry of Micro, Small and Medium

enterprises. It aims to set up a network of technology centers and set up incubation

centers to accelerate entrepreneurship and to promote start-ups for innovation in

agro -based industries.”

Social Science: Scope for R&D

Apart from the technical subjects it’s equally important for social sciences to

venture into R&D. The Indian Council for social science and research provides

grants to different research institutes for carrying out the projects . It clearly states

Each institute determines its own direction of research, which includes a

wide spectrum of subjects related to agricultural and rural development,

industrial structure and growth, income distribution and poverty,

employment and wages, inter-regional differences in levels of development,

DOES INDIA NEED MOR R&D FOR FUTURE? 14

education, health, nutrition, problems of weaker sections of society

including women, energy, technology, ecology and environment, and social,

cultural and institutional aspects of development. Thus, research studies

have generated substantial empirical knowledge of the structure of Indian

economy, polity and society and their dynamics both at the national and

regional levels.

In the India-EU strategic partnership a roadmap to 2025 the potential for R&D is

talked about . It mentions

Promote cooperation on social sciences and humanities. To this extent, the

conclusion of an Implementing Arrangement between the Indian Council for

Social Science and Research (ICSSR) and the European Commission is to

be welcomed. The parties also agree to continue with the EC-SERB

implementation agreement, allowing for Indian scientists to join ERC teams

in Europe for a short duration.

However there are a few challenges in this field. It’s found that the research quality

assessment is complicated in India. The different criteria like bibilometric analysis

cannot be a reliable yardstick . Hence it's found that peer review research is the

best available option. Also the twin problem of poor infrastructure and funding
DOES INDIA NEED MOR R&D FOR FUTURE? 15

continues to plague the field of social sciences as well. It's also a matter of concern

whether research work is actually being used to guide policy formulation

The overall picture of how social research is utilized for policy-making in

India is sketchy (Mathur 2009). Gender-related policies could be cited as a

good example of research placing an issue on the policy agenda. The Com-

mittee on the Status of Women (1974) built up a new range of research on

gender discrimination, had excellent communication and dissemination

strategies, and led to the formation of an independent department (now

Ministry) for women and child development (Hay and Sudarshan 2010). In

general, however, a great deal of policy relevant research simply does not

enter the public domain, making it difficult to assess its quality, or for it to

contribute to public debate.

Way forward: Prioritising sectors

Apart from the various schemes that seek to promote R&D in the field of

infrastructure, manufacturing and services some parallel goals must also be set.

A perfect success story for R&D in India has been that of ISRO. that of ISRO.

With its RESPOND programme it allows for universities and academia to take part

in various projects. It states

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To enable the faculty of Universities/ Institutes to prepare suitable proposals

of relevance to space programme, a detailed list of R&D areas/sub areas

/topics have been evolved as per major programme of ISRO, by the various

centers of ISRO and published annually. RESPOND programme is mutually

beneficial to ISRO and Academia, wherein the rich talent of Academia/

faculty is being harnessed to support the Nation’s Space programme.

It was because of relevant R&D that India was able to economize the Mars Orbiter

Mission as compared to other countries. ISRO has also ventured into various social

sector areas where early warning satellite for disaster management , soil quality

eta. Are being developed. Harnessing our space capabilities will help to steer an

equitable growth. Antrix the commercial and marketing arm of ISRO has

formulated it's CSR & SD policy in June 2014 with the vision

 To contribute to the orderly growth and development of the society by

taking measures towards eradication of poverty, removal of illiteracy and

raising the standards of living so that the economic divide is narrowed and

equal opportunities abound for all, irrespective of caste, creed or economic

status.

The latest projects like Tele medicine satellite data on monsoon sensing and water

availability are important.

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Similarly in the defence sector as well R&D is a need of the hour . iDEX has been

launched which aims at bringing in varied actors like innovators and entrepreneurs

to find solutions for modernizing Indian military.R&D institutes will be brought

under the ambit to push forward for innovation.

It can be seen that the importance of R&D is pivotal for balanced growth. Also it

seems to be one of the most effective measures for India to break away from the

'middle income trap'. R&D is skill and human capital intensive which proves to be

an ideal way out for India's demographic dividend. The solutions that are then

derived can help bolster in demand and give a boost to the market. While the

sectors are being chalked out for immediate action India must also aim higher for

ambitious projects . R&D with its multiple benefits does require an initial

structuring of infrastructure and resources. With the willingness to go down this

path India can actualize the latent potential. As the country has already proven to

be a base for many MNC seeking cheap and efficient workforce it’s about time that

we upgrade and emerge as the R&D hub.

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