The Economic Advisory Council to the Prime Minister (EAC-PM) has released a report titled ‘R&D Expenditure Ecosystem’.
The report has said that the growth in research and development(R&D) expenditure should be commensurate with the economy’s growth and should be targeted to reach at least 2% of the gross domestic product (GDP) by 2022.
The report has pointed out that India’s public investment in R&D as a fraction of GDP has remained stagnant over the last two decades.
It has remained constant at around 0.6% to 0.7% of GDP and this is well below the major countries such as the United States (US)(2.8%), China (2.1%), Israel (4.3%) and Korea (4.2%).
The report has said that government expenditure on R&D is undertaken almost entirely by the central government.It has called for greater participation of state government and the private sector in overall R&D spending.
To stimulate the private sector’s investment in R&D from current 0.35% of GDP,it has suggested that a minimum percentage of turn-over of the company may be invested in R&D by medium and large enterprises registered in India.
The report has recommended that states can partner with Centre to jointly fund research and innovation programmes through socially designed Central Sponsored Schemes(CSS).
The report also pitched for creating 30 dedicated R&D Exports Hub and a corpus of Rs 5,000 crore for funding mega projects with cross cutting themes which are of national interest.
PMEAC is a non-constitutional, non-permanent and independent body constituted to give economic advice to the Government of India, specifically the Prime Minister.
The council serves to highlight key economic issues facing the country to the government of India from a neutral viewpoint.It advises the Prime Minister on economic issues like inflation, microfinance, and industrial output.