Lok Sabha Question No. 4718 (UNSTARRED), answered on 2023-03-29
Subject: R&D Expenditure
Ministry: SCIENCE AND TECHNOLOGY
Asked by: Y. S. Avinash Reddy, Komati Reddy Venkat Reddy, Manne Srinivas Reddy

## GOVERNMENT OF INDIA MINISTRY OF SCIENCE AND TECHNOLOGY

## DEPARTMENT OF SCIENCE AND TECHNOLOGY LOK SABHA

UNSTARRED QUESTION No. 4718 TO BE ANSWERED ON 29.3.2023

## R&D EXPENDITURE

4718.     SHRI Y.S. AVINASH REDDY:

SHRI KOMATI REDDY VENKAT REDDY:

SHRI MANNE SRINIVAS REDDY:

मंğी

Will  the  Minister  of  SCIENCE  AND  TECHNOLOGY ͪव£ान और Ĥौɮयोͬगकȧ be pleased to state:

- (a) whether the country's Research and Development (R&D) expenditure is very low as compared to major economies and is much below the world average of 1.8%, if so, the details thereof;
- (b)  whether the main reason is the low investment in R&D by the corporate sector as it accounts for about two-thirds of gross domestic expenditure on R&D in leading economies and its share in India is just 37% and if so, the details
- thereof since 2014 to till date; and
- (c) the corrective steps being taken to encourage investment more in R&D by inviting the private players?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) FOR THE MINISTRY OF SCIENCE AND TECHNOLOGY AND EARTH SCIENCES (DR. JITENDRA SINGH)

ͪव£ान और Ĥौɮयोͬगकȧ तथा पृ Øवी ͪव£ान मंğालय क े राÏय मंğी ( èवतंğ Ĥभार) (डॉ . िजतɅġ ͧसंह)

(a)&(b) As per the latest available R&D statistics, the national expenditure on research and development measured as Gross Expenditure on Research and Development (GERD) in absolute terms has been continuously increasing over the  years.  However,  the  Gross  Expenditure  on  Research  and  Development

(GERD) measured as percentage of Gross Domestic Product (GDP) has been

hovering around 0.7 % during last few years and is below the world average. The reason behind this low  GERD  to GDP ratio is mainly due to inadequate corporate sector investment into GERD. The share of corporate sector in GERD has hovered around 34-38% during 2014-15 to 2020-21. The details are as under:

| Year                                            |   2014-15 |   2015-16 |   2016-17 |   2017-18 |   2018-19 |   2019-20 |   2020-21 |
|-------------------------------------------------|-----------|-----------|-----------|-----------|-----------|-----------|-----------|
| Corporate Sector Investment in GERD (Rs. Crore) |   32538.4 |   36022.2 |   39124.7 |   41855.9 |   42489.9 |   44753.5 |   46388.1 |
| % share of Corporate Sector in GERD             |      37   |      38   |      38   |      37   |      34   |      34   |      37   |

(c)          The  government  has  taken  up  several  steps  to  encourage  more investment in R&D in the country. Some of the key efforts made by Government include: the successive increase in plan allocations for Scientific Departments, incentivizing  investment  by  private  sector  to  increase  their  share  in  GERD, introducing flexible tools for public procurement;  creating avenues  for collaborative STI funding through portfolio-based funding mechanisms such as Public-Private-Partnerships and other innovative hybrid funding mechanisms. The Government has allowed corporate sector to make R&D investments under the provision of Corporate Social Responsibility (CSR). Corporates can invest in technology business incubators or contribute in research efforts carried out by institutions and national research laboratories as a part of their CSR. There are specific investment incentives offered such as Location-based tax incentives that enables 100% deductions of profits generated from establishing and doing business in northeastern states of India.

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