Centre holds discussion to boost private sector R&D spending
The Indian government is looking for ways to boost private sector investment in research and development (R&D) as it prepares for the Union Budget 2024. At present, private sector spending on innovation makes up only 37% of the total, compared to an average of 68% in the top 10 global economies. Ajay Kumar Sood, the Prime Minister's Principal Scientific Advisor, has been leading discussions on this issue with stakeholders, under the guidance of the Ministry of Science and Technology.
Expanding corporate social responsibility scope
Despite expanding corporate social responsibility (CSR) to include R&D, India lacks a specific research mandate for businesses. In 2023, the country maintained its 40th position out of 132 nations in the Global Innovation Index rankings by the World Intellectual Property Organisation. However, there's a need for more original research and patents in various sectors, such as advanced materials innovation.
R&D spending by big companies
Major tech companies like Meta, Amazon, Apple, Alphabet, and Microsoft spend a combined total of around $200 billion on R&D each year. In 2021-2022 alone, Amazon's R&D spending surpassed $73 billion. Additionally, big pharmaceutical companies worldwide allocate 20% of their revenue to R&D. Currently, the US dominates innovation spending. The Indian government believes that both manufacturing and R&D are crucial for owning technologies and distributing income throughout the economy.
Government focus on infrastructure, innovation, investment, and inclusiveness
Finance Minister Nirmala Sitharaman has highlighted the Centre's focus on four Is to make India a developed nation by 2047. They include infrastructure, investment, innovation, and inclusiveness. Suman Bery, NITI Aayog Vice Chairman, stated that for India to escape the middle-income trap, the private sector must increase its R&D contribution through its own investments, leading to a sustainable growth path.
