Total Pageviews

Friday, September 13, 2013

White paper on stimulating private sector investment in R&D

Indian government allocates a significant amount of tax payers money in R&D, the XIIth plan provides an investment of Rs 1,20, 430 crores. Apart from criticism of poor returns on public investment in R&D there is always a plea that private sector should chip in to raise national investment in R&D. In this background, the joint Committee of Government and industry released report on measures to be taken to stimulate investment by private sector in R&D. The main recommendations are:

1. Redefine private sector R&D investment as per global norms and practices.
How much private sector spends on R&D? No one shows. The first recommendation is to get the facts correct.

2.Mandatory disclosure of R&D investment by Private Sector
How to get correct data? The 2nd recommendation seeks to make it mandatory for private sector to disclose investment in R&D. S&T departments is low in power hierarchy , do not have means to enforce this recommendation but CII hopefully would persuade their members to part with information.

3.Constitution of an Expert Committee for rationalization of Heads of R&D investment for direct
and indirect facilitation
Directly, private sector gets small R&D funding from government  but indirect benefits in the form of fiscal incentives are significant, estimated at Rs 6335 crores in 2012-13. The procedural complexity of these tax benefits led to new Indian ABC classification of research, Applied research, Basic research, Chartered accounts research. The third recommendation calls for rationalization and simplification. The effectiveness of fiscal incentives in attracting private capital to research has been debated for long. In the present atmosphere of scams, one cannot expect direct funding  but atleast the fiscal incentives can be announced for longer period.

4.Valuing IPR assets and Provide for demand pool for R&D outputs through provisions for public procurement:.
This is a non starter. Again S&T ministry cannot influence government decision on procurement by government agencies.

5.Build Technology Depth of Industry in Priority Sectors and usher an era of PPP R&D and Technology Deployments for providing technology solutions to National Priority Areas.
Prioritization in our democratic set up has proved be illusive. One can only hope that sooner than later plans will replace wishlists.

6.Incentives for commercialization on R&D:
Innovation is global where as research is local. Technology commercialization is possible when the structure for research proposals is dramatically recast, which seems unlikely in an environment where decision makers , experts and beneficiaries wear multiple hats.

No comments: