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Budget 2023 Can Lay Groundwork For India To Assume Leadership In Research & Innovation

Budget 2023

Budget 2023 Can Lay Groundwork For India To for Leadership In Research

Budget 2023 must prioritize research and innovation

In order for India to achieve its goal of having a $10 trillion economy by 2035, value-added growth must be pursued. The development of intellectual capital is essential for advancing science and technology that will benefit common Indians and have a long-lasting effect on the world. This process is driven by research and innovation.

In a recent speech at the 108th Indian Science Congress, Prime Minister Narendra Modi outlined the strategic role that science and technology will play in determining the future of the nation. In light of this, I anticipate that science, technology, and innovation will receive a lot of attention in Budget 2023.

Up until this point, basic and translational research have been gradually funded by the government. This, along with a thriving start-up ecosystem, is encouraging the creation of novel, disruptive technologies on a national level. The fact that India has for the first time ranked among the Top 40 nations in the 132-nation Global Innovation Index (GII) for 2022 is cause for celebration.

Budget 2023

India needs to implement a comprehensive research and innovation plan in order to build on these advancements. R&D investments will need to increase dramatically if we want to compete with the world’s most innovative nations.

We as a country must now support the crucial thrust areas for research and innovation with the appropriate economic incentives, legislation, and resources.

Budgetary funding for R&D must be increased

India’s gross spending on R&D (GERD) as a share of GDP has been static at roughly 0.7% for about ten years; this is lower than Brazil’s (1.16%), South Africa’s (0.83%), and other countries’ GERDs.

If India intends to build on its current progress in science and technology, GERD must be increased to the previously stated amount of 2% of GDP.

Restore the R&D tax credit

In-house R&D expenses were eligible for a 20% weighted tax credit under Section 35 (2AB) until March 31, 2020. Value decreased as a proportion of revenue from 8% in 2018 to 6.6 % in 2021 due to the diluting of this fiscal incentive and the substantial decrease in R&D expenditure by Indian pharmaceutical businesses.

In this regard, it is crucial that the government reinstate the 200 percent weighted tax deduction for R&D costs, which includes all costs associated with the “lab to market” journey of a product, including patenting charges.

Describe research-related incentives

Research Linked Incentives (RLIs), modelled after the current Product Linked Incentives (PLIs) scheme, must be implemented immediately. The Indian pharmaceutical industry will be strongly encouraged to invest in R&D as well as to forge the crucial connections with academia that are required for collaborative innovation.

The development of capacity and world-class capabilities across the pharmaceutical value chain can result from RLIs for “moonshot” industries like genomic medicines, biologic drugs that are both novel and biosimilar, complex generics, orphan drugs, precision medicines, vaccines, and next-generation antibiotics.

In five years, the private sector’s contribution to GERD is expected to double thanks to the Science, Technology, and Innovation Policy (STIP) 2020. To do this, corporations are permitted to donate monies through their Corporate Social Responsibility (CSR) programmes to universities, incubators, and research organizations that get public funding for their work in the fields of science, technology, engineering, and medicine.

The government now has a rare chance to broaden the scope of CSR spending to include creative R&D projects in the private sector. Innovative programmes with a high inherent risk can be the focus of private sector research funding. The government should impose a restriction that money designated as risk capital for innovative research should not exceed 25% of a company’s annual CSR budget in order to ensure consistency and ease of implementation.