As competition from emerging countries is rising to the Indian information technology (IT) industry, it is time to improve the sector, said President Pranab Mukherjee.
“Though India has an important position in the global IT and IT-enabled services, its prominence is being challenged by new emerging economies. We have to therefore, improve the competitiveness of this sector,” he said here at the annual session of PHD Chamber of Commerce and Industry.
He said research and development is the basic constituent of promoting innovation. The culture of research needs to be further augmented.
“Only about 6,000 patent applications were filed by Indians in 2010, which is a mere 0.3 per cent of the total applications filed in the world. India spends only 0.9 per cent of GDP on R&D whereas China spends about 1.2 per cent, UK 1.7 per cent and Israel 4.3 per cent,” he said.
National manufacturing policy
The National Manufacturing Policy, which was announced a year ago has addressed this opportunity, by aiming to increase the growth rate in manufacturing to 12 to 14 per cent over the medium term.
“In another decade, the share of manufacturing in the country’s GDP is envisaged to rise to 25 per cent,” Mukherjee said.
Research and development
India should increase its expenditure in this area to become globally relevant in manufacturing. In countries such as Japan, the US and South Korea, the private sector finances a majority of expenditure on industrial R&D.
The share of private sector in research and development in India is only one-fourth and there is an urgent need to increase it, he said.
To achieve the goal of improving R&D, there is also need to strengthen many engineering and technical institutions.
Technical education programme
The Government, with support from the World Bank, has been conducting ‘technical education quality improvement programme’, under which 127 engineering institutions were covered for quality improvement in its first phase from 2002 to 2009.
“In the second phase from 2010 to 2014, it has been envisaged to cover another 190 engineering institutions,” he said.
With the advantage of a demographic dividend and the average age of population in India is below 30 years and over 60 per cent in the working age group, it provides with a unique advantage for driving future growth.
“But, it could also pose a serious challenge of creating 220 million jobs by 2025,” he added.