Lok Sabha Question No. 541 (UNSTARRED), answered on 2015-12-02
Subject: Scientific and Industrial Research Development
Ministry: SCIENCE AND TECHNOLOGY
Asked by: MAHENDRA NATH PANDEY

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

## LOK SABHA

UNSTARRED QUESTION NO. 541

(To BE ANSWERED ON 02.12.2015)

## SCIENTIFIC AND INDUSTRIAL RESEARCH DEVELOPMENT

## 541. DR: MAHENDER NATH PANDEY

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

- (a) Whether industrial development has been affected in the country owing to slow pace of research and development;
- (b) If SO, the details thereof and the action taken by the Government in this regard;
- (c) the budgetary allocation made by the Government for scientific and industrial research and development under the current plan;
- (d) Whether the Government proposes to make adhoc allocation for upgradation of basic research and development programmes; and
- (e) if so, the details thereof?

## ANSWER

## MINISTER OF STATE FOR SCIENCE AND TECHNOLOGY AND EARTH SCIENCES

(SHRI Y: S. CHOWDARY)

- (a) The pace of industrial development is dependent upon a number of international and domestic factors including the overall global environment as well as the pace of research and development (R&d):

As projected by the Department of Industrial Policy and Promotion; Ministry of Commerce and Industry, the rate of industrial growth, measured in terms of Index of Industrial Production (IIP) during the current financial year (AprilSeptember, 2015-16) is recorded higher at 4.0 per cent as compared to the growth of 2.9 per cent during the same period of previous year (AprilSeptember, 2014-15).

The pace of R&D, measured in terms of national expenditure on ReD a percentage of Gross Domestic Product (GDP) as depicted in Table 1, is seen to be increasing over the years:

Table 1: National Expenditure on R&D as a Percentage of GDP (RD-G) from 1995-96 to 2011-12

| Year      |   RD-G |
|-----------|--------|
| 1995-96   |   0.67 |
| 1996-97   |   0.68 |
| 1997-98   |   0.73 |
| 1998-99   |   0.75 |
| 1999-2000 |   0.78 |
| 2000-01   |   0.81 |

| Year    | RD-G   |
|---------|--------|
| 2001-02 | 0.79   |
| 2002-03 | 0.77   |
| 2003-04 | 0.77   |
| 2004-05 | 0..81  |
| 2005-06 | 0.88   |
| 2006-07 | 0.87   |

| Year    |   RD-G |
|---------|--------|
| 2007-08 |   0.86 |
| 2008-09 |   0.89 |
| 2009-10 |   0.87 |
| 2010-11 |   0.87 |
| 2011-12 |   0.88 |

Another measure of increase in the pace of R&D is the number of Intellectual Property Rights (IPR) applications: Annexure 1 depicts the status of IPR applications in recent years:

- (b) As per the publication titled "Research and Development Statistics (2011 12)" published by the Department of Science and Technology (DST); Ministry of Science & Technology, Government of India in December 2013, total national investment on R&D and the share of  public and private sector companies during 2008-09, 2009-10, 2010-11 and 2011-12 is as shown in Table 2\_

Table 2: National Investment on R&D

| Sector                             | 2008-09   | 2009-10   | 2010-11 *   | 2011-12*   |
|------------------------------------|-----------|-----------|-------------|------------|
| Central & State Govt:              | 28619.40  | 32721.22  | 37908.32    | 43918.22   |
| Higher Education                   | 1911.56   | 2199.97   | 2547.43     | 2949.76    |
| Public Sector Companies            | 2457.02   | 2814.56   | #3264.84    | #3787.15   |
| Private Sector Companies           | 14365.40  | 15305.55  | 18332.88    | 21965.31   |
| Total National Investment          | 47353.38  | 53041.30  | 62053.47    | 72620.44   |
| Share of Public Sector Companies_  | 5.19%     | 5.31%     | #5.26%      | #5.21%     |
| Share of Private Sector Companies_ | 30.34%    | 28.86%    | 29.54%      | 30.25%     |

Note: *Estimated #Projected

In comparison, the Government is aware that in the member countries of Organization for Economic Co-operation and Development (OCED) that are noted for strides in industriai aeveiopment a substantiai percentage the total investment in ReD is made by private sector companies, e-g: 77% in Japan, 68% in Germany, 65% in USA, 45% in UK and 52% in France:

Keeping the above in view, a number of steps have been taken by the Government to enhance industrial growth and increase the share of industries in R&D, significant among them being the following:

- The Make in India programme with 25 thrust sectors which was launched in  September 2014 is devised to transform India into a global design and manufacturing hub and includes major new initiatives designed to facilitate investment, foster innovation, protect intellectual property, and build best-in-class manufacturing infrastructure, thus boosting industrial development and R&D:
- The  policy and procedures on Foreign Direct Investment has been
- progressively liberalized:
- For ease of doing business, Government has inter-alia set up an Investor Facilitation Cell, and launched e-biz Mission Mode Project
- providing 29 Government to Business (GZB) services.
- On creating world class infrastructure, Delhi Mumbai Industrial Corridor (DMIC) project is under implementation and many initiatives including Amritsar-Kolkata Industrial Corridor, ChennaiBengaluru  Industrial Corridor, Bengaluru-Mumbai Economic
- other Corridor and the Vizag-Chennai Industrial Corridor have been conceptualized:
- The industry sector has been urged to increase their share to 50% in the national R&D expenditure.
- The Government has targeted to raise the national R&D expenditure
- to 2% of GDP by the end of 12th five year plan:
- The guidelines on R&D for Central Public Sector Enterprises (CPSEs) issued by the Department of Public Enterprises prescribe that & Navratna CPSEs and Miniratna & & other CPSEs incur a minimum R&D expenditure of 1% and 0.5% of Profit
- After Tax (PAT), respectively:
- The Council of   Scientific & Industrial its constituent laboratories provides technology, product and knowledgebased services to the industry covering a wide spectrum of science and technology-
- There are various funding schemes under several Government ministriesl departments including the Ministry of Science & Technology, that support industry in undertaking technology development, upgradation and commercialization activities:
- The Government provides a number of fiscal incentives to the industrial sector to increase their investment in ReD, as listed in
- Annexure 2.
- The 'Start up India, Stand-up India' campaign was
- announced by the honourable Prime Minister on 15th August, 2015 seeking to provide an impetus to the entrepreneurial landscape of India:
- The Atal Innovation Mission (AIM) is being set up under National Institution for Transforming India (NITI Aayog): AIM will be an Innovation Promotion Platform involving academics, entrepreneurs, and researchers drawing upon national and international experiences to foster a culture of innovation, R&D in India.
- A mechanism called Self Employment and Talent Utilization (SETU) has been established under NITI Aayog: SETU will be a TechnoFinancial, Incubation and Facilitation Programme to support all aspects of start-up businesses, and other self-employment activities, particularly in technology-driven areas:
- An India Aspiration Fund (IAF) managed by Small Industries Development Bank of India (SIDBI), which is India's Principal Financial Institution, has been established for the promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector-
- SIDBI also launched the Make in India Loan for Small  Enterprises (SMILE) Scheme. SMILE will offer quasi-equity and term based short term loans to Indian SMEs which will have less stringent rules and regulations:
- Micro Units Development and Refinance Agency (MUDRA) Bank will be responsible for regulating and refinancing all Micro-finance Institutions (MFI) which are in the business of lending to microlsmall business entities engaged in manufacturing;  trading and services activities.
- (c) Table 3 lists the budgetary allocation made by the Government to the Department of Scientific Industrial Research (DSIR) for   scientific and industrial research and development:
- (d)&(e) There are no indications that the Government proposes to make adhoc aliocation for upgradation of basic research and development programmes:

DSIR in Rs crore for

| Year   | 2012-13   | 2012-13   | 2013-14   | 2013-14   | 2014-15   | 2014-15   | 2015-16   | 2015-16   |
|--------|-----------|-----------|-----------|-----------|-----------|-----------|-----------|-----------|
|        | Plan      | Non-Plan  | Plan      | Non-Plan] | Plan      | Non-Plan  | Plan      | Non-Plan  |
| BE     | 2013.00   | 1471.00   | 2013.00   | 1558.00   | 2100.00   | 1607.15   | 2281.00   | 1750.00   |
| RE     | 1555.00   | 1401.00   | 1620.00   | 1558.00   | 1600.00   | 1800.00   | 2192.50   | 1644.20   |
| AE     |           | 1400.82   | 1602.82   | 1556.72   | 1594.15   |           |           |           |

Increase in IPR applications andIPRsgranted: -

## Patents

| Year      | 2004 05   | 06    | 07    |    08 |   2007-| 2008- 09 |   2009 10 | 11          | 12          |   2012- 13 |   2013- 14 |   2014-15 December 2014) |
|-----------|-----------|-------|-------|-------|------------------------|-----------|-------------|-------------|------------|------------|--------------------------|
| Filed     | 17466     | 24505 | 28940 | 35218 |                  36812 |     34287 |             | 39400 43197 |      43674 |      42950 |                    32269 |
| Examined  | 14813     | 11569 | 14119 | 11751 |                  10296 |      6069 | 11208 11031 |             |      12268 |      18306 |                    15525 |
| Granted   | 1911      | 4320  | 7539  | 15316 |                  16061 |      6168 | 7509        | 4381        |       4126 |       4225 |                     4817 |
| Disposals |           |       |       | 15795 |                  17136 |     11339 | 12851       | 8488        |       9027 |      11672 |                     9893 |

## Designs

| Year       |   2006- |   2007- 08 |   2008- 09 |   2009- 10 |   2010- 11 |   2011- 12 |   2012- 13 |   2013 - 14 |   2014-15 December 2014) |
|------------|---------|------------|------------|------------|------------|------------|------------|-------------|--------------------------|
| Filed      |    5521 |       6402 |       6557 |       6092 |       7589 |       8373 |       8337 |        8533 |                     7124 |
| Examined   |    4976 |       6183 |       6446 |       6266 |       6277 |       6511 |       6771 |        7281 |                     5811 |
| Registered |    4250 |       4928 |       4772 |       6025 |       9206 |       6590 |       7250 |        7178 |                     5373 |

Trade Marks

| Year       | 2006 07   | 2007- 08   |   2008- 09 |   2009- 10 |   2010- 11 |   2011- 12 |   2012- 13 |   2013- 14 |   201415 December 2014) |
|------------|-----------|------------|------------|------------|------------|------------|------------|------------|-------------------------|
| Filed      | 103419    | 123514     |     130172 |     141943 |     179317 |     183588 |     194216 |     200005 |                  153991 |
| Examined   | 85185     | 63605      |     105219 |      25875 |     205065 |     116263 |     202385 |     203086 |                  109661 |
| Registered | 109361    | 100857     |     102257 |      67490 |     115472 |      51765 |      44361 |      67873 |                   32784 |
| Disposal   |           |            |     126540 |      76310 |     132507 |      57867 |      69736 |     104753 |                   70365 |

| Year       |   2006 07 |   2007- 08 |   09 |   2009 10 |   2010- 11 | 2011- 12   |   201 2-13 |   2013- 14 | 201415 (Ypto December 2014)   |
|------------|-----------|------------|------|-----------|------------|------------|------------|------------|-------------------------------|
| Filed      |        33 |         37 |    4 |        40 |         27 | 148        |         24 |         75 | 25                            |
| Registered |         3 |         31 |   45 |        14 |         29 |            |         21 |         22 |                               |

Comparative Trends of IPRs Grante d/Registered

| Year        | 2006- 07   |   2007- 08 |   2028 09 |   2009- 10 |   2010 11 |   201 1- 12 |   2012- 13 |   2013- 14 | 2014-15 {Upt0 December 2014)   |
|-------------|------------|------------|-----------|------------|-----------|-------------|------------|------------|--------------------------------|
| Patents     | 7539       |      15316 |     16061 |       6168 |      7509 |        4381 |       4126 |       4225 | 4817                           |
| Designs     | 4250       |       4928 |      4772 |       6025 |      9206 |        6590 |       7250 |       7178 | 5373                           |
| Trade Marks | 109361     |     100857 |    102257 |      67490 |    115472 |       51765 |      44361 |      67873 | 32784                          |
| Geographica |            |         31 |        45 |         14 |        29 |          23 |         21 |         22 |                                |

Indications

## Annexure

## Annexure 2

## Some of the incentives and support measures presently available for enhancing scientific R&D.

- 100% write-off of capital expenditure on R&D in the year the expenditure is incurred under section 35(1) (iv) ofI.T. Act; 1961.
- 100% write-off of revenue expenditure on R&D under section 35(1)(i) of LT. Act; 1961.
- Weighted Tax deduction   @200% on expenditure incurred in   approved in-house R&D facility, to companies engaged in business of biotechnology or in any business of manufacture Or production of any article or (not being an article or specified in the list of the eleventh schedule) under section 35(2AB) of I.T. Act; 1961. Provision is valid till 31-03-2017. thing thing
- Weighted tax deductions@200% for sponsored research programmes in approved National laboratories, Universities and IITs (Section 35(2AA) of L.T. Act).
- Tax Holiday for ten consecutive assessment years to commercial R&D companies under section 80-
- Income tax   rebate @175% on donations for scientific   research made to non-commercial research organization approved and notified under section 35(1) (ii) and 35(1) (iii) of LT. Act, 1961.
- Accelerated  depreciation   allowance upto 40% on investment on new plants and machinery based on indigenous technology as per rule 5(2) of LT. Rules.
- Customs duty exemption on goods imported for R&D and central excise duty waiver on purchases of indigenous goods for ReD to public funded and privately funded institutions registered with DSIR. (Notification No.51/96-customs dated 23  July 1996 and 24/2007-customs dated 1 March  2007; Notification No. 10/97-central excise dated March 1997 and No. 16/2007- central excise dated 1 March 2007).
- Customs exemption on imports use in R&D projects   funded by Govt: in industries (Notification No. 50/96-customs dated 23 July 1996). duty
- Central excise waiver for 3 years on specified goods designed and developed by a wholly owned Indian company, National laboratory: Public funded research institutions or Universities and patented in any two countries from amongst India, USA, Japan and in any one country of the European Union. The specified goods are manufactured by a wholly owned Indian Company: This exemption is available based on certification from DSIR (Notification No. 13/99-central excise dated February 1999). duty 28th
- DSIR recognized in-house R&D units engaged in R&D in biotechnology and pharmaceuticals sectors can import specified equipment duty free (List 28). In respect of R&D units with manufacturing facilities, the benefits of full customs exemption   for specified equipment is also available for manufacturing activity to the extent of 25% of the previous year' $ export turnover: duty

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