Lok Sabha Question No. 3392 (UNSTARRED), answered on 2020-03-13
Subject: Consultation Process for National Policy
Ministry: SCIENCE AND TECHNOLOGY
Asked by: Feroze Varun Gandhi

## GOVERNMENT OF INDIA MINISTRY OF SCIENCE AND TECHNOLOGY DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH

## LOK SABHA UNSTARRED QUESTION NO. 3392

(TO BE ANSWERED ON 13.03.2020)

## CONSULTATION PROCESS FOR NATIONAL POLICY

## 3392.  SHRI FEROZE VARUN GANDHI:

## Will the Minister of SCIENCE AND TECHNOLOGY be pleased to state:

- (a)   whether  the  decision  to  restore  the  200  per  cent  income  tax deduction  for  in  house  research  and  development  encouraged  the private investments;
- (b)   if so, the details of the investment during the last three years;
- (c)   whether  the  Government  had  begun  the  consultation  process  for National Science Technology and Innovation Policy for India; and
- (d)   if so, the process of consultation and the advancements so far in this regard?

## ANSWER

MINISTER  OF  HEALTH  AND  FAMILY  WELFARE;  MINISTER  OF  SCIENCE AND TECHNOLOGY; AND MINISTER OF EARTH SCIENCES (Dr. HARSH VARDHAN)

- (a)  Sub-section (2AB) of section 35 of the Income-tax Act, 1961  provided for  weighted  deduction  of  200%  to  a  company  engaged  in  the business  of  bio-technology  or  manufacturing  of  article  or  thing (except article or thing specified in Schedule-XI) for the expenditure (not being expenditure in the nature of cost of any land or building) incurred on scientific research on an approved in-house research and development  facility.  This  was  reduced  to  150%  with  effect  from assessment year 2018-19 and to 100% with effect from assessment year  2021-22  by  the  Finance  Act,  2016.  There  is  no  proposal  under consideration  for  restoring  the  deduction  to  200%  for  in-house research  and  development.  Further,  it  is  the  stated  policy  of  the Government  to  phase  out  all  exemptions  and  deductions  while simultaneously rationalizing the tax rates. In line with the said policy of  the  Government,  the  Taxation  Laws  (Amendment)  Act,  2019 (TLAA), inter-alia, reduced the corporate tax rates by providing for a concessional taxation regime of 22% for existing domestic

companies  and  a  concessional  taxation  regime  of  15%  for  new manufacturing domestic companies (satisfying prescribed conditions) provided that they do not avail of any specified incentive or deduction. Further, such companies opting for the concessional tax regime shall also not be required to pay any Minimum Alternate Tax (MAT).

- (b)  Expenditure  incurred  on  scientific  research  by  DSIR  approved  inhouse R&D centres of Industries as reported in Form 3CL during last three years are as follows:
- (c) & (d) Yes Sir. The Government  has  begun  the consultation process for a new  draft of National Science Technology and Innovation (STI) Policy for India. A draft framework has been prepared for initiating consultations on a new STI policy involving Office of the Principal Scientific Adviser (PSA) to the Government  of India. Accordingly, 6 consultative groups involving (i) Scientific Ministries, Industry and Academia (ii) Socio-economic & other line Ministries (iii) State  Governments  (iv)  Global  Partners  (v)  Young  Scientists  and technologists including women,  and (vi) Science & Innovation Attaches  of  Indian  and  Foreign  Missions  have  been  constituted.  A policy drafting committee has also been constituted. One meeting of the Consultative Group on 'Scientific Ministries, Industry and Academia' and Drafting Committee has been held so far.

| Year     |   Amount (in Rs. crores) |
|----------|--------------------------|
| 2016-17  |                  13774   |
| 2017- 18 |                  16015   |
| 2018-19  |                  18905.2 |

*****