Discuss the challenges India faces in increasing its R&D intensity compared to global peers. How can structured disclosures help address these challenges?

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Introduction

India’s Gross Expenditure on R&D (GERD) remains around 0.6–0.7% of GDP, far below innovation-driven economies such as South Korea and Israel.
Corporate R&D intensity is particularly low, limiting India’s transition to a knowledge-based economy.

Challenges in Increasing R&D Intensity

Dominance of public sector in R&D funding, with limited private sector participation.
Risk aversion among firms due to uncertain returns and long gestation periods.
Weak industry–academia collaboration and limited commercialization of research.
Inadequate intellectual property (IP) enforcement and low patenting culture.
Information asymmetry between firms and investors regarding R&D outcomes.
Short-term financial market pressures discouraging long-term innovation spending.
Limited availability of high-end research infrastructure and skilled manpower.

Role of Structured Disclosures

Mandatory, standardised reporting of R&D expenditure, objectives, and outcomes reduces information gaps.
Enhances investor confidence by distinguishing serious innovators from “token” spenders.
Enables better valuation of intangible assets and innovation potential.
Encourages long-term capital allocation towards research-intensive firms.
Improves accountability of management for R&D efficiency and impact.
Facilitates benchmarking across industries, fostering competitive innovation.
Supports evidence-based policymaking through reliable innovation data.

Way Forward

Integrating R&D disclosure norms within SEBI and corporate governance frameworks.
Linking tax incentives and public procurement benefits to transparent R&D reporting.
Promoting outcome-based metrics alongside expenditure-based indicators.

Conclusion

Enhancing R&D intensity requires not only fiscal incentives but also institutional transparency.
Structured disclosures can correct information asymmetries, attract capital, and create an ecosystem that rewards genuine innovation.

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