Lack of R&D incentives for Domestic Companies in Telecom PLI

 SITARA has written to PMO on this:

RECOMMENDATIONS

 For this we request the following:

1.      We are not asking for a withdrawal of the scheme, as some employment benefits are perceived under it, we are only asking for an Addendum which gives strong incentives for domestic companies investing in R&D including manpower accounted as per Indian accounting standard.

2.      To prevent foreign OEMs from availing of the benefits under R&D for assembly operations and IPR which is not Indian, even if the bulk of their R&D is done in captive R&D centres in India with no spillover into the domestic ecosystem, it must be specified that R&D benefits will go only to companies headquartered in India/ owning IPR registered in India and the worldwide profit made on these IPR must be accrued in India only. As of now R&D is capped to only 15% of the investment. Creating Indian IPR should be mandatory as it will ensure the “Indian-ness” of even MNC companies in addition to their low value-addition activities in India.

3.      Also, the companies that can avail of the scheme have been limited to 10 for MSME and 10 for domestic and global firms, of which only 3 are reserved for domestic, leading to the danger that a few  companies will monopolise the benefits. Hence the addendum must also remove the cap of 10 successful companies in each MSME and non-MSME category respectively from 10 – and extend it to all eligible candidates. In addition, to ensure fairness and prevent just one applicant from getting the entire amount, there should be a cap on the maximum subsidy amount given to any single applicant.