New Delhi, Oct 20 (KNN) After the Economic Survey pointed out the abysmal levels of investment, the Prime Minister’s Science Technology and Innovation Advisory Council (PM-STIAC) wants to make it mandatory for medium and large enterprises in key sectors to set aside funds for research and development (R&D).

The high-level panel wants the private sector to step up in this regard and take that share to at least 1% of GDP by 2022.

Line ministries should be mandated to allocate at least 2% of their budgets as research and innovation grants for developing and deploying technologies related to priority concerns, said the council.

At the first meeting the council discussed the issue in detail at which it also deliberated over a mandatory investment model proposed by the Confederation of Indian Industry (CII).

Loss-making companies may be exempted from mandatory R&D investments.

The council also said that R&D investment should be calculated at the level of each industry rather than at group level with each sector disclosing this through audits and self-declarations. 

A 100% tax holiday is proposed by the council for products emerging out of R&D for the first five years of commercialization, provided they are patented or pending patent application, to incentivize industry. 

An Advanced Mission Mode Innovation and Research (ADMIRE) is proposed to be launched by line ministries to provide direct R&D grants to industry on a 50-50 model through competitive bidding. 

The economic survey had said that R&D investment in India has been stagnant for 20 years at 0.6-0.7% of gross domestic product with that by the private sector at 0.35%.

The lobby group had suggested that the pharmaceuticals and biotechnology industries should be mandated to set aside 8% of turnover for R&D, citing a global average of 15%. 

For automobiles, it advocated 3% of turnover, 2% for technology hardware and equipment, 5% for software and computer services, 2% for electronic and electrical equipment, 1% each for industrial engineering, chemicals and general industrials and 0.55% for oil and gas as well as construction.