The Innovation Drive

The R&D corpus in the public sector should help open the floodgates of private risk capital

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The government has hit the nail on the head with its decision to create a research and development (R&D)/innovation corpus of a reasonable size in the public sector, and let the private sector leverage it. The industry has promptly welcomed the ₹1 lakh-crore Anusandhan National Research Foundation, and especially lauded its two-tiered structure involving second-level fund managers. In a capital-scarce country, where allocations of even the available funds are heavily skewed, and often help entrench market concentrations, R&D has never got a head start. Though the country was aptly placed for making rapid strides in labour-intensive manufacturing for long years, actual accomplishment has been suboptimal. Policies that safeguarded profitability of upstream players at the cost of the downstream value chain, low labour productivity, and logistical constraints prevented the country from winning its spurs.