Asserting that India needs a greater thrust on innovation to catapult itself to a higher growth trajectory, the Economic Survey has emphasised on the need of boosting gross expenditure on Research and Development (R&D) and called for scaling up of business sector contribution to R&D by more than 50 per cent.
The Economic Survey 2020-21 said it requires boosting gross expenditure on R&D from 0.7 per cent of GDP currently, "to at least the average level of Gross Domestic Expenditure on Research and Development (GERD) in other top ten economies (GDP current US$) of over two per cent. It also involves significantly calling up R&D personnel and researchers in the country, especially in the private sector."
The ministry stated India's innovation ranking is much lower than expected for its level of access to equity capital.
This points towards the need for India's business sector to significantly ramp up investments in R&D. India's performance on innovations has been lowered than expected for its level of its accessing to equity finance, observed the survey.
The survey highlighted "the need for boosting business sector contribution to total GERD from the current 37 per cent to close to 68 per cent.
It also suggested that the sectors total R&D contribution needs to be scaled from the present level of 30 per cent and 34 per cent personnel of researches to 58 per cent and 53 per cent respectively.
The survey has stated that the government sector contributes disproportionately a large share in total GERD at three times the average of other large economies.
"However, the business sector's contribution to GERD is amongst the lowest in India. The business sector's contribution to total R&D personnel and researchers also lags behind that in other large economies. This situation has prevailed despite the tax incentives for innovation having been more liberal than other economies," it said.
India entered the top 50 innovating countries for the first time in 2020 since the inception of the Global Innovation Index in 2007, by improving its rank from 81 in 2015 to 48 in 2020.
( With inputs from ANI )
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