Why are so many helicopters crashing in Uttarakhand?

Source: The post “Why are so many helicopters crashing in Uttarakhand?” has been created based on “Why are so many helicopters crashing in Uttarakhand? The risks explained” published in “Indian Express” on 2nd November 2026.

UPSC Syllabus: GS 3-Indian Economy

Context: India’s Gross Expenditure on Research and Development (GERD) increased from 0.71% of GDP in 2013–14 to 0.84% in 2023–24, with 0.9% projected for 2025–26. However, India continues to lag behind innovation-driven economies, and achieving the target of 2% of GDP by 2036 requires greater participation from business enterprises.

Key Trends in India’s R&D Expenditure

1. Rising Business Participation: The share of Business Enterprise R&D (BERD) in GERD increased from 43.6% in 2014–15 to 49.3% in 2023–24.
2. Dominance of Multinational Companies: Indian and foreign multinational companies accounted for 71.3% of BERD in 2023–24, indicating a concentration of business-led research.
3. Sectoral Concentration: Transportation and pharmaceuticals together account for approximately 54% of BERD, reflecting the limited spread of R&D across industries.
4. International Comparison: Business enterprises account for more than 70% of total R&D expenditure in countries such as South Korea and China, highlighting the scope for greater private-sector investment in India.

Major Challenges in Scaling Up R&D

1. Low R&D Expenditure: India’s GERD-to-GDP ratio remains below 1%, limiting its ability to develop advanced technologies and compete with innovation-driven economies.
2. Concentration Among Large Firms: R&D expenditure is concentrated in a few large companies and sectors, making the overall research ecosystem dependent on a limited number of enterprises.
3. Low R&D Intensity: Indian companies generally invest a smaller share of their sales in R&D than global leaders. For instance, the average R&D intensity of the top five global pharmaceutical firms was 22.4%, compared with a maximum of 8% among the eight Indian pharmaceutical and biotechnology firms.
4. Insufficient Support for Smaller Firms: Smaller enterprises, despite demonstrating high R&D intensity in certain sectors, require stronger fiscal incentives and financial support to expand their research activities.
5. Declining Fiscal Incentives: The weighted deduction for in-house R&D was reduced from 200% in 2010–11 to 150% in 2017–18 and subsequently to 100% in 2020–21, weakening an important incentive for research investment.
6. Limited Sectoral Diversification: Heavy dependence on transportation and pharmaceuticals restricts the broader development of R&D across strategic and emerging industries.
7. Long-Term Investment Requirements: Achieving the 2% target by 2036 requires sustained growth in business-led research, which cannot be achieved through the efforts of a few large enterprises alone.

Measures to Strengthen Business-Led R&D

1. Restore Fiscal Incentives: Reinstate enhanced tax deductions or equivalent incentives for in-house R&D expenditure, with greater benefits for smaller firms to encourage sustained research investment.
2. Promote MSME Participation: Design targeted incentives and accessible financing mechanisms for small and medium enterprises, particularly those demonstrating high R&D intensity and innovation potential.
3. Identify Strategic Sectors: Prioritise sectors based on economic competitiveness, national security and employment generation, and adopt mission-oriented policies to accelerate research and technological development.
4. Strengthen Strategic Missions: Build on initiatives such as the Quantum Mission, Semiconductor Mission and IndiaAI Mission to expand domestic technological capabilities.
5. Leverage the ₹1 Lakh Crore RDI Scheme: Use the Research, Development and Innovation scheme as a financing mechanism to support private-sector research and strategic technology missions.
6. Encourage Sectoral Diversification: Expand R&D investment beyond transportation and pharmaceuticals into scientific instruments and other strategic and emerging industries.
7. Adopt a Long-Term R&D Strategy: Establish a clear roadmap to increase BERD from approximately 0.42% to 1.4% of GDP by 2036, requiring business-led R&D to grow roughly twice as fast as nominal GDP.

Conclusion: India’s transition towards a developed economy requires a broad-based and sustained expansion of research and innovation. Restoring fiscal incentives, supporting smaller enterprises and prioritising strategic sectors can help raise business-led R&D expenditure and achieve the target of 2% of GDP by 2036.

Question: Despite improvements in India’s R&D expenditure, achieving the target of 2% of GDP by 2036 remains a challenge. Discuss the major constraints and suggest measures to strengthen business-led R&D in India.

Source: Business Line