India’s R&D spend far less than China, Korea, as private companies, states abstain

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July 25, 2019 5:24 PM

With private companies and state governments staying almost out of the research and development field, India’s expenditure on R&D is sustained at a level far behind that in other competing economies.

R&D, research and development, research, private sector, state government, PSU, CPSE, new ideaIndia spends less than one per cent of its GDP on research and development activities. (Bloomberg image)

With private companies and state governments staying almost out of the research and development field, India’s expenditure on R&D is sustained at a level far behind that in other competing economies. India spends less than one per cent of its GDP on research and development activities. While countries like the US, China, Israel, and Korea spend 2.5 per cent to 4.5 per cent, India spends only 0.6 per cent to 0.7 per cent of GDP on research and development activities, the Department of Industrial Policy and Promotion said in a report this week. Investment in R&D plays a major role in a country’s progress. R&D expenditure in India is almost entirely taken care of by the government, whereas the private sector plays a minimal role, which is not the case in advanced countries, the report said. Productivity, exports, employment, and capital formation are directly impacted by the progress in R&D.

In application-oriented research and technology development, greater participation of state governments and the private sector is much more important, according to DIPP. Broadening the horizons of investments can add to the resources required for R&D.

Talking about the scenario of research and development in India, member secretary of PMEAC, Ratan Watal said in the report, “India needs to re-double its efforts to improve its ranking in the science and research ecosystem by increasing the national expenditure on R&D. The growth in R&D expenditure should be commensurate with the growth of GDP and should reach at least two percent of GDP by 2022.”

In April 2018, Prime Minister Narendra Modi asked PSUs to initiate collaborative efforts with reputed universities like IITs, in the field of R&D. Since then, it has become mandatory for all the PSUs to set up innovation cells to work on market-oriented research, Seema Bahuguna, Secretary, Department of Public Enterprises, noted in the report. She added that the current requirement is that all PSUs should spend higher on R&D, not just the companies in the petroleum and power sectors. R&D in India is mostly carried out in the petroleum and power sectors.

 

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