Our corporate landscape needs to be inclusive to achieve Viksit Bharat

Like many others, I have high regards for our corporate sector. They are a key pillar of our economy and its development odyssey. Therefore, I was a bit puzzled when many neo-neutral journos and public policy experts were seen engaged in casting aspersions on the country’s industrial honchos when Elon Musk, the world’s richest man, launched the sixth test of his SpaceX rocket on November 19 with United States President-elect Donald Trump joining him to watch the historic moment.

It was reported that Trump and Musk travelled to Brownsville, Texas, to attend the launch of the giant Starship rocket at SpaceX’s test site in nearby Boca Chica. Musk, the owner of SpaceX, electric carmaker Tesla and social media platform X, is said to have spent close to $130 million to help Trump get re-elected as the US President. Even in our country top business tycoons have their political preferences, which are amply reflected in their ties with them and now in the purchases of electoral bonds.

A section of journalists – digital and print – was seen vouching for the fact that Indian corporate houses are not spending as generously on research and development (R&D) as their counterparts in the United States and other developed nations. It is a fact that private sector spending on R&D in India is not adequate.

On the Global Innovation Index (GII), India held 40th position in 2023, and ranked ninth in the Nature’s Index-2023. As per the Economy Survey 2023-24, India’s R&D investment as a percentage of gross domestic product (GDP) stands at just 0.64 per cent.

This figure is notably lower as compared to China’s 2.41 per cent, US’s 3.47 per cent, and Israel’s 5.71 per cent. The private sector’s contribution to R&D in India is at 36.4 per cent of the country’s gross expenditure on R&D (GERD), whereas in China and the US, private sector contributions are an astounding 77 per cent and 75 per cent, respectively. Deloitte India’s white paper titled ‘Structural Changes to Incentivise the Research & Development (R&D) Sector in India’, which was released in May, proposed implementing crucial reforms to bridge the gap in R&D expenditure, foster industry-academia collaboration and streamline regulations to accelerate innovation and investment. It said that India’s GERD stands at 0.65 per cent of GDP, which is lower than the global average of 1.79 per cent. It called for dedicated R&D hubs with benefits akin to those in special economic zones, including tax incentives, duty exemptions and infrastructure support, could create conducive environment for research and innovation.

Similarly, enhancing the scope and scale of R&D tax incentives, such as the patent box regime, to cover a broader range of intellectual properties, will attract more investment, while introducing loan guarantee programmes and increasing interest allocation for R&D-intensive industries, will lower financial risks associated with high-cost innovation projects. I don’t know if the wish-list of the Indian corporate sector will ever be fulfilled and they can start spending more on R & D. However, there is also a huge scope for them to do some self-introspection in many matters of crucial significance. On July 24, 2023, then Union Minister of State for Finance Dr. Bhagwat Kisanrao Karad informed the Lok Sabha that as per the Central Repository of Information on Large Credits (CRILC) data, the total funded – amount outstanding of scheduled commercial banks (SCBs) to corporate company borrowers, classified as non-performing assets (NPAs) and having amount outstanding of Rs. 1,000 crore or more, was Rs. 1,03,975 crore as on 31.3.2023. It is a huge amount, and if paid back to the lenders, they would have enough surplus funds to finance other productive projects including R&D initiatives.

Will the consortium of private sector players ever come forward to address the problem of willful defaulters? Will they issue a joint statement urging fugitive business titans to come back to India and face the law of the land and pay the outstanding money to the lenders? Perhaps, never!

Similarly, I do feel that our corporate sector was never focussed on embracing and implementing affirmative measures in their recruitment policies. Instead of making sacrifices for the holistic empowerment of those who were socially, educationally and economically deprived, Indian corporate sector players, barring a few exceptions, were ever occupied with their own business interests. There could be many reasons but the most prominent among them was the fact that the forces inimical to the rise of Shudras comprising OBCs, SCs and STs, were calling the shots in major industrial houses of the country before Independence and even now, though their grip is not firm now. Yet, they have been able to ensure that the private sector is kept out of the ambit of affirmative measures. During the UPA regime, some serious efforts were made to extend the benefits of quota in the private sector to SCs and STs, but they did not let this historic initiative become a reality.

Imagine if our private sector players would have mobilized all stakeholders and joined hands with them in driving the idea of last mile development since we became independent as a nation, things would have been much different now.

The fact is that even today not much has changed in their outlook. In the name of corporate social responsibility (CSR), what is happening in the country is in the public domain. It is a total conundrum and nothing less than a way and means to hoodwink the system. The outcome of CSR spending at the ground level is a matter of rigorous audit and research.

When top corporate houses start running hospitals, colleges and universities where the needy get ethical, quality and affordable healthcare and education, people will really appreciate them. If they are doing so, then they should publicise their philanthropic acts vigorously so that the needy can reap the benefits. Last but not the least, they should not delay any more in introducing affirmative measures in their recruitment policies where eligible job seekers from the weaker sections of society such as SCs, ST and OBCS get preferential treatment. Will they do so? I have my fingers crossed. (The writer is a senior journalist, author and columnist. The views expressed are strictly his personal)