Former Nasscom Chairman B V R Mohan Reddy has called for a significant increase in their research and development spending, which is very low at present when compared to the spending by their peers in China and the US.
“India’s current R&D spending is about 0.648 per cent of its GDP, which is lower compared to China’s 2.4 per cent and the US’s 3.5 per cent. More than 50 per cent of India’s R&D expenditure comes from the government. In contrast, in countries like the US and China, less than 10 per cent comes from the government, with the corporate world contributing about 70 per cent,” Reddy, who is also the Executive Chairman of Cyient Ltd, said.
Delivering the keynote address at the maiden Corporate Innovation Conclave-2025, organised by start-up incubator T-Hub, here on Friday, he said corporates in India need to spend more on research.
“We are a $4 trillion economy now, and if we want to be a $30 trillion economy in 21-22 years, we require a sustained growth of 8 per cent,” he said.
“We became a $4 trillion economy after 77 years of Independence. We would like to multiply it by seven times in less than 25 years. That’s not an easy task,” he said.
Stating that contribution from services to the GDP, which is at 60 per cent., can’t go up any further, he said the country needed to focus on the manufacturing sector, which is currently contributing about 17 per cent. “Manufacturing has to grow big time. It should go up to at least 27 per cent of our GDP,” he said.
“We are the sixth largest manufacturing country in the world. But we are about 2.6 per cent of the total manufacturing that happens in the world. So we have to grow from 2.6 per cent to about 12.6 per cent to increase the manufacturing sector’s contribution to the GDP,” he said.
Start-ups have a very important role to play because start-ups have the characteristic of being nimble-footed.
“Start-ups are like innovation engines, and corporates are like power plants. They are interdependent, and when they work in synergy, it creates a win-win situation for both,” he said.