India needs investment in R&D to strengthen the economy: Economic Survey

NEW DELHI: The recently released Economic Survey 2021 has underscored the significance of private investments in research and development (R&D). The survey revealed that the business sector in India contributes about 37 per cent to gross expenditure on R&D, which is almost half of what businesses in the top ten countries contribute (68 per cent on average), inspite of the fact that tax incentives for R&D were more liberal in India in comparison to those in the top ten economies.

The survey added that India needs to significantly ramp up investment in R&D if it is to achieve its aspiration to emerge as the third largest economy in the world. It mentioned that reliance on “Jugad innovation” risks missing the crucial opportunity to innovate nation’s way into the future, which will require a major thrust on R&D by the business sector of the country. According to the survey, resident firms in India should work on increasing their share in total patents. It said, “India must also focus on strengthening institutions and business sophistication to improve its performance on innovation outputs.”