Lok Sabha Question No. 3349 (UNSTARRED), answered on 2015-12-18
Subject: Committee on Innovation and Entrepreneurship
Ministry: PLANNING
Asked by: P.K.SREEMATHI TEACHER

## GOVERNMENT OF INDIA MINISTRY OF PLANNING

## LOK SABHA

## UNSTARRED QUESTION No. 3349 TO BE ANSWERED ON 18.12.2015

## COMMITTEE ON INNOVATION AND ENTREPRENEURSHIP

## 3349. SHRIMATI P.K. SREEMATHI TEACHER:

Will the Minister of PLANNING be pleased to State:

- (a) Whether the Expert Committee on Innovation and Entrepreneurship has submitted its report;
- (b) If so, the details thereof along with major recommendations;
- (c)  whether the Government has received any proposal for awarding cash prize to motivate people having novelty of ideas to expedite research in preparing a market of products in the country; and
- (d) If so, the details thereof and the action taken thereon?

## ANSWER

## MINISTER OF STATE (INDEPENDENT CHARGE) FOR MINISTRY OF PLANNING AND MINISTER OF STATE FOR DEFENCE (RAO INDERJIT SINGH)

- (a) & (b):  Yes Madam, the Expert Committee on Innovation and Entrepreneurship under the Chairmanship of Prof. Tarun Khanna, Director, South Asia Institute, Harvard University, USA has submitted its report in October, 2015. The Committee has made wide ranging recommendations for short term  (where  action  can  be  taken  relatively  quickly  to  deliver  almost  immediate  payoffs), Medium term (that can be addressed within a 5-7 year time frame) and Long term, which are likely  to  have  long  gestation  periods,  but  will  lead  to  a  profound  transformation  in  the entrepreneurial fabric of the country. A gist of the recommendations of the Expert Committee is at Annexure-I.

(c) & (d):  No, Madam.

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## Gist of the recommendations of the Expert Committee on Innovations and Entrepreneurship

The Recommendations of the Expert Committee on Innovation and Entrepreneurship, constituted by NITI Aayog under the Chairmanship of Prof. Tarun Khanna, to accelerate the entrepreneurship agenda in the country, have been categorized in to short, medium, and long-term recommendations

## (A) Short Term - Providing Adequate Support to Early-Stage Ventures

## 1. Utilization of AIM Funds :

The AIM budget should be used entirely towards introducing competitions to solve pressing economic and social problems (12 Grand prizes/Grand Challenges annually) through the Incentivize Innovation in India (i3) programme for finding out ultra-low-cost solutions.

## 2. Harnessing Corporate Funds to Finance R&D by

(i)  Incentivizing  the  Corporate  to  invest  a  part  of  their  profits  in  research  labs  in  universities  and/  or industry-university collaborative research and towards corporate venture capital funds, for the purposes of investment in start-ups and/ or incubators; and (ii) Introducing a clause for directing 5% of the value of all contracts with foreign defense companies, to fund R&D in universities.

## 3. Improving the Efficiency of Incubators by

(i) Increasing public investment in incubators and roping in private sector funding;  (ii) Creating Virtual Incubators; (iii) Keeping  Incubators Up  to Date; (iv) Linking Funding  of Incubators with an Institutionalized Annual Ranking; (v) Introducing Specialized Sector-based Incubation Services; and (vi) Strengthening Linkage between the Corporate Sector and Incubators.

## 4. Utilisation of SETU Funds :

To  jumpstart  innovation,  Rs.  500  crore  from  SETU  funds  should  be  used  for  upgrading  the  existing incubators in the country and the remaining Rs. 500 crore for setting up 500 Tinkering Labs across the country for introducing a 'Make in Universities' program with one 3D printer per institute and trained people.

## 5. Fostering a National Entrepreneurship & Innovation Movement by

(i) Instituting a National Entrepreneurs' Day; (ii) Creation of National Action Brigade-on the lines of the 'Teach  for  India'  or  the  National  Cadet  Corps  (NCC);  (iii)  Harnessing  the  NRI  talent  pool;  and  (iv) Introducing 'faculty entrepreneurial fellowships' to encourage professors to be Stakeholders / partners of the entrepreneurial and incubation eco-systems in universities.

## (B) Medium Term - Creating an Enabling Environment for Innovation

## 1. Embracing the Platform Mindset by

(i)  Creating  digital  platforms,  similar  to  Aadhaar  to  inspire  innovation  &  entrepreneurship  Building sector-specif1c  searchable  digital  platforms  like:  Health  Care  records,  Pensions,  Insurance,  and Education; and Digitization of government processes. AIM may be empowered to appoint India's Chief Information Officer to manage the Digital Platforms programme.

## 2. Reforming the Education System and Upskilling Workers by

adopting  a  multi-layered  approach  which  include:  Reorienting  school  curricula;  Annual  assessment  of schools and faculty; Providing easy access to entrepreneurship education courses at secondary and tertiary levels;  Focusing  on  technology-based  solutions  to  education;  and  Opening  up  the  market  to  global education providers.

## 3. Strengthening the Intellectual Property (IP) Rights Regime

including  Setting  up  of  Dedicated  IP  Courts  to  improve  the  efficiency  and  speed  in  IP  judgement; Increasing the number of Patent Examiners; and Establishment of National Virtual II' Platform containing a database of all the resolved IP cases in India, as well as details of those under litigation.

## 4. Improving the Ease of Doing Business through

a series of measures which include: (i) Digitization of government permits; (ii) Creation of a Central ID for enterprises; (iii) Revisiting the Companies Act to distinguish between closely held private companies, public companies, and publicly listed companies; (iv) Revisiting Section 56 of the Income Tax Act that has greatly impacted fair market valuation norms on angel investments; (v) Moving service tax back to actuals rather than accruals; (vi) Improving access to capital; (vii) Labour market reforms; (viii) Creation of an online nationwide real estate registry-Registration for all real-estate transactions should be made mandatory within 48 hours, with strict penalties for non-compliance; (ix) Creation of an AIM Entrepreneurship Index for  measuring entrepreneurial activity in  India;  (x)  Creation  of  a  separate  regulatory  category  for  new business; and (xi) Creating an enabling environment for social enterprise by involving the corporate sector to fund social enterprise.

- (C)  Longer  Term:  Addressing  the  Cultural  Context: To  expedite  cultural  changes,  the  Expert Committee has made the following recommendations:
1. Attach Entrepreneurship to Large Scale Economic and Social Programs like: 'Swacch Bharat' to encourage  and  promote  social  entrepreneurs  focused  on  the  areas  of  cleanliness,  hygiene  and  civic responsibility.
2.  Promote  New,  High-Potential  Sectors  via  the  'Make  in  India'  Campaign -  set-up  incentive structures to develop a few chosen high-potential industries as part of the 'Make in India' initiative.
3. Foster and encourage a Culture of Coordination and Collaboration between ministries, departments, enterprises and incubator cells across the country.

## 4. Re-define Success :

Innovation-centred organizations within the government system must be allowed to pursue projects and experiments that are high risk and may fail. Different measures of accountability and success must be outlined.

## 5. Make Entrepreneurship Part of the Social-inclusion Agenda -

Bringing in more women, dalits, rural population and the urban underprivileged into the fold of new Indian entrepreneurs and innovators.

## (D) Proposed Structure of the AIM

The Expert Committee has recommended establishment of a 'Not for Profit' 'Section 8' Company for implementation of the Atal Innovation Mission with Vice Chairman, NITI Aayog as the Chairman, four independent directors from Industry, Civil Society, Academia and judiciary. In addition, there will be seven more Directors (Secretaries to GOI of various Ministries/Departments) on the Board of the Company.

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