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For several years, R&D was a much-neglected domain for small and mid-sized business in India. Burdened by high costs and the lack of a skilled workforce, SMEs have been hesitant to spend on their R&D activities.
However, with the changing times, Indian SMEs are realising the benefits offered by modern R&D facilities. As a result, a growing number of SMEs, particularly those belonging to niche manufacturing segments, are spending aggressively on their R&D infrastructure.
'Earlier, R&D was restricted mostly to large corporate houses as SMEs lacked the monetary strength required to build a robust infrastructure. The scenario has changed considerably in the past few years and many SMEs now spend a considerable amount on their R&D facilities,' comments Srinivasan A, proprietor of Vimal Agencies, a small-sized industrial equipment manufacturing unit in Coimbatore.
Budget boosts R&D activities
The government is also taking some important measures to ensure implementation of innovative R&D facilities across the SME segment. In the recent Union Budget, Finance Minister Pranab Mukherjee announced the weighted deduction of about 150% on expenditure borne by manufacturing units on their in-house R&D facilities.
Market experts opine that the government's announcement will promote R&D activities among small firms, thereby making them more competitive. According to Dr Biswanath Roy, Lecturer, Department of Civil Engineering, Dumkul Institute of Engineering & Technology, Murshidabad, 'R&D spending in the country has plunged below 1% of our GDP. This is affecting the overall growth of our economy. Hence, the government has taken the right decision to enhance the scope of technological development.'
Meanwhile, the industry is also urging the government to revise the prevailing norms on the payment of royalty for using trademarks and on fees pertaining to technology transfer.
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About the Author:
David Parks is a well known author and has written articles on Business Trade Leads, B2B Portal, Trade Shows Directory, suppliers, Manufactures and many other subjects.
