This report is the outcome of the project commissioned under the National Science and Technology Management Information System (NSTMIS) scheme on International Advanced Research Centre for Powder Metallurgy and New Materials, a DST institution located in Hyderabad. Shri K.V.S.P. Rao, ex-Scientist-G & Head-RDI Division in the Department of Scientific and Industrial Research is the Principal Investigator for the project and Dr Sanjay Bhardwaj, Head, Centre for Technology Acquisition and Transfer, ARCI, Hyderabad is the Co-Principal Investigator for the project.
10. Conclusions and Recommendations
10.1. Conclusions • The industrial R&D has shown significant growth over the years, Indian Industry has gained technological competence and has played a pivotal role in accruing significant economic benefits through R&D efforts. • The Industry has responded with remarkable growth rate in R&D expenditure, increased turnovers and making a niche in the Global R&D scenario. It has also provided significant benefits in terms of employment generation, better healthcare, reducing environmental pollutions, energy utilization. • Based on the data studied, it is observed that duty exemptions and weighted tax deductions over the years has helped the growth of in-house R&D units. • Many foreign companies are still interested to take the benefits of the incentives but removal of weighted tax deduction has discouraged them while taking investment decision on R&D in India. • The Joint Committee of Industry and Government of India in its report made in May 2013, recorded that the current R&D incentives, 200% Weighted Tax deductions offered by the Government of India is one of the best in the world already. The report also suggests- while retaining the current direct and indirect fiscal incentives, some rationalization for covering the entire value chain of industrial R&D and technology commercialization may be examined and simplification and rationalization processes enacted.
Schemes and programmes to enable R&D as a source of revenue generation may be announced for the benefit of the industry. Such companies create good R&D infrastructure to carry out R&D work for its translation into industrial production with innovative business models. This also helps in monetisation of the R&D efforts. • India is gradually progressing in its R&D efforts. The current incentives have helped the industry in boosting the R&D investments in the country. The R&D expenditure by companies have grown over the years, however, for the R&D to have a substantial growth, more private funding in R&D is still needed. • The R&D units have developed products and technologies for manufacture of world class products. Due to the Automobile boom since 1990s many Japanese, German, US, and British manufacturers have established their manufacturing units in India taking advantage of the highly competitive automobile component industry. Even luxury automobile manufacturing companies from Europe and USA started their units in India. To compete with them, Indian companies have also expanded their manufacturing bases and R&D units all over the country. • A similar trend was seen in pharmaceuticals including bulk drugs, intermediates and APIs. Huge investments were seen in the R&D units with an eye on export markets. USFDA approval was also given to many companies indicating their superiority and competitiveness at par with global companies. Emerging areas like biotechnology products for healthcare, industrial products and services have also sprung up in medium scale to small scale levels. MNCs have also established their manufacturing units independently and as joint ventures with Indian companies.
It is therefore time to review the policy on fiscal incentives for industrial research and development and reintroduce incentives in a selective manner especially for those sectors which are still in the growth phase. • Companies with large spends on R&D have, no doubt availed fiscal incentives and benefited the most across all the sectors. Even though small and medium companies have also availed the benefits of fiscal incentives, there are many more firms whose expenditures have not been much as their R&D budgets are quite low. The 100 larger companies have spent amount of Rs. 3685600 lakhs of which 74 companies, spending above Rs.100 Cr, have spent an aggregate of Rs.3459700 lakhs. If we take the average spending of companies incurring more than Rs.100 crores on research and development, it works out to the order of Rs.474 crores per company.
Details : KVSP RAO,
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