A government panel wants companies to allocate 1% of their profit for research by universities and to fund start-ups, in line with Prime Minister Narendra Modi’s push for R&D and new business ventures in the country.
Also, it asks the government to hold an annual innovation challenge competition where a dozen winners can get dedicated funds to take their ideas to the market.
A National Institution for Transforming India (NITI) Aayog’s panel on Atal Innovation Mission has recommended a different approach to foster innovation and research in India with an aim to revive manufacturing and to provide new job opportunities to the Indian youth.
Government sources said the prime minister’s office has asked ministries to examine the recommendations while framing a manufacturing policy and for the 2016-17 budget.
Finance minister Arun Jaitely had announced Rs 150 crore to Atal Innovation Mission in his previous budget speech after which a committee to recommend the framework of the scheme was set up.
A target of Rs 200 crore a year should be set for public investment in incubators in the initial years, said the panel dominated by experts from the private sector. It asked the government to scale up funding.
The panel suggested a slew of funding measures, including private companies dedicating 1% of their profit to start-ups and incubators and funding innovative research in universities.
It said money from the corporate social responsibility fund of companies could also be used for funding innovative ideas.
The panel advised the government to introduce a “Make in Universities” programme by setting up 500 labs with one 3D printer each to boost the spirit of “production and collaboration” across the country.
All contracts with foreign defence companies above $5 billion should include a clause for 5% of value to be directed to establish research-centric universities, it said.
A slew of changes are needed, the committee said, because India had been lagging in innovation with only 40,000 new jobs created through incubators since 1982.
To show how India fared globally, the report said, the Global Innovation Index 2014 gave India the lowest position among all BRIC nations and criticised the nation’s education system for bias against ideas and innovators.
Indian entrepreneurs struggle four to five times more for raising money as compared to their American counterparts and the difficulty increases manifold for women and those from the deprived section, it said, quoting two recent surveys.