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Learn from Indian cricket team, CEA Subramanian tells India Inc.

In an exclusive interaction, Subramanian said Indian corporate sector needs to learn from Indian cricket team and have the same mindset towards innovation

twitter-logoJoe C Mathew | February 3, 2021 | Updated 11:48 IST
Learn from Indian cricket team, CEA Subramanian tells India Inc.
Chief Economic Advisor Krishnamurthy Subramanian

Chief Economic Advisor Krishnamurthy Subramanian wants Indian industry to not just patronise cricket but also learn from Indian cricket team on how to have global ambitions and achieve them through research and development (R&D) of futuristic technologies and products.  

"Indian cricket is not happy saying that we will win in domestic pitches, they say, we want to go and win everywhere in the world. For all the passion that Indian industry shows towards cricket, it should learn from it," Subramanian says.

In an exclusive interaction with BusinessToday.In, Subramanian said Indian corporate sector needs to learn from Indian cricket team and have the same mindset towards innovation. "When the IT and BPO sector was booming, they just kept that cash. That was the time to invest and generate the next WhatsApp. You had the tax incentives too. But it's the mindset that was missing and is required," he said.

According to Subramanian, the industry cannot claim that it is not getting sufficient incentives for innovation. "If you take the gross expenditure on R&D, look at how much is the spend by the private sector and the government, and compare it with top 10 economies, you will see while private sector accounts for 36  percent in India, it is 68 percent in the advanced economies. Government does about 60 percent of R&D investments in India, as against about 22 percent in the advanced economies. The R&D incentives are more liberal in India compared to the top 10 economies," he added.

Also read: Anand Mahindra to gift Thar SUVs to six debutants after India's historic win in Australia

Subramanian says that innovation has to happen for the industry to be competitive. "Apple did not come up with iPad because the US government gave tax incentive. The private sector therefore needs to say lets innovate so that we become the world leaders," he argues.

The Economic Survey 2020-21 prepared by the team led by Subramanian devotes a chapter on the topic. It attempts to show that in India it is the government that does disproportionate amount of heavy-lifting on R&D by contributing 56 per cent of the gross expenditure, which is three times the average contributed by governments in the top ten economies.  

Also read: Budget 2021: India Inc welcomes tax relief, infra spend fillip

The survey admits that India's gross expenditure on R&D at 0.65 per cent of GDP is much lower than that of the top 10 economies (1.5-3 per cent of GDP) but attributes it to the disproportionately lower contribution from the business sector. "Indian government sector contributes the highest share of total R&D personnel (36 per cent) and researchers (23 per cent) amongst the top ten economies (nine per cent on average). Indian business sector's contribution to the total R&D personnel (30 per cent) and researchers (34 per cent) in the country is the second lowest amongst the top ten economies (over 50 per cent on average). Indian residents contribute only 36 per cent of patents filed in India as compared to 62 per cent on average in the top ten economies. Indian firms also perform below expectation on innovation for their level of access to equity finance, which is the most crucial for innovation," the survey notes.

The survey recommends that India must significantly ramp up investment in R&D if it is to achieve its aspiration to emerge as the third largest economy in terms of GDP. It cautions that mere reliance on "Jugaad innovation" risks missing crucial opportunity to innovate our way into the future.  

The onus of this lies with Indian industry, it says. "India's resident firms must increase their share in total patents to a level commensurate to our status as the fifth largest economy in current US$. India must also focus on strengthening institutions and business sophistication to improve its performance on innovation outputs," the survey recommends.

Is cricket crazy India Inc listening?

Also read: Budget 2021: India's win against Australia, Rabindranath Tagore's poem feature in FM's speech

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