1.        While presenting the budget for 2001  the Union Finance Minister  has introduced  contemporary situation  with the remark " The Indian economy has continued to exhibit both growth and resilience that have characterized its performance in the past few years .It is now ten years since economic reforms began in 1991 " . Economic dailies such as  The Hindu Business Line described the budget as " Bundle of Joy"  and almost all sectors of the industry  greeted the event with great enthusiasm. While not denying the factors which have created the above enthusiasm among the industrial - "liberal" economic circles, there appears to be enough reasons to be worried about as  far as the S&T sector is concerned .

2.        As part of his budget speech , the FM  has referred to only the following two S&T related  issues.

a.        "To be globally competitive, our companies need to increase their investment  and expenditure for research and development . Currently a weighted deduction of 150% of the expenditure on in-house R&D in certain areas is allowed to companies. Sir, I propose to extend this weighted deduction to biotechnology as well as clinical trials , filing of patents and obtaining regulatory approvals.

b.        " We are establishing a Traditional Knowledge Digital Library to bring the knowledge already  in the public domain  in international languages to prevent the grant of patents. We are also introducing a new scheme for strengthening the State Drug Testing Laboratories and pharmacies.  We propose to provide Indian Systems of Medicine and Homeopathy benefits similar to the pharmaceutical industry".

3.        While not minimizing the importance of  fresh/additional initiatives  for strengthening the above components of indigenous S&T efforts ,  one cannot also deny that there are far  bigger issues which  has been awaiting  the attention of  successive governments , needing a consolidated  strategy matching with the needs of the New Economic Regime itself. In a Note submitted  for the pre-budget meeting  held as early as January 15 , 1993 by the then Finance Minister Dr Manmohan Singh , the following points were highlighted.

a.        The prime contributors of industrial research must be the industries themselves , either through their own in-house  research units or through sponsorship/collaboration with public funded research units. Under the NEP regime there need not be any differentiation between industries owned by Indians or non-Indians , at least for arguments sake.

b.        In order that industries are cajoled to adhere to this  as part of their corporate policy itself, the government may have to come out with promotional and even statutory measures . Such measures have reportedly been part and parcel of agencies such as MITI with respect to the Japanese
industry , specifically during her early years.

c.        It is worthwhile to introduce concepts such as a statutory Technology Audit Statement as part of the Annual Report of companies  enabling the shareholders to be aware of  technology gaps which could result in falling competitiveness ,  promotional measures such as a Technology Depreciation  Fund akin to Equipment Depreciation Fund to finance the continuous need for undertaking specific R&D to overcome the technology gap and wherever required to upgrade the technology if required by even selective import , and so on.,  for incorporation into the Companies Act , rather than leaving the same to the likes of the companies.

d.        Indian industry has been by and large  a dependant  sector, dependent on foreign technology suppliers for new projects , expansion of existing capacities and perhaps even for modernization , even after decades of the so-called " independent development " . Even most of the consulting companies such as  MECON, EIL,etc are again essentially supply agents of foreign technologies only. Thanks to such a pattern of industrialization, the  in-house industrial research sector has not developed even after four decades the necessary  technological expertise to back up the industry at the level at which the support is needed , with even the so-called success stories of indigenous technologies not even scratching the surface of what
one considers as a meaningful level . Nor the public funded R&D laboratories have been able to develop adequate organic link with industries  to the extent needed for meaningful results. In other words , the Indian industry, unlike those in Japan or Korea, has not used technology import  essentially as an "assisted take off" strategy , to quote Homi  Bhabha, but as an end in itself. Obviously a new  industrial - S&T strategy is needed to face the situation arising out of the New Economic Policy , IF THAT POLICY ITSELF has to succeed .

4.        It is  important to note  that while efforts are being made in the 2001 budget  to review developments in the industrial, agricultural and infrastructure sectors during the decade long " period of reforms" , there is hardly any attempt  to review the state of affairs of  the S&T Sector, which after all form the  backbone of those sectors. Thanks to the well deserved pressures of the drugs and biotechnology sectors , some promotional  measures have been doled out to them in the budget , this again  not as part of an overall strategy.

5.        The urgency  of the situation is clear from the following contemporary situation

a.        As per data of DSIR ,.there are about 1160 government recognized in-house R&D units , whose total expenditure during 1999-2000 was reportedly of the order of Rs  2000 crores. Of this over 200 units spend about Rs 1crore per year ,again  according to DSIR.

b.        It is difficult for outsiders to assess the quality or efficacy of R&D in
the industrial sector , except perhaps through objective criteria such as
their Intellectual Property in the form  of  patents , as is increasingly being done in advanced countries .Thanks to  the large scale lack of awareness on IPR's in our country , it may be a bit too early to evaluate applied/industrial R&D based on patents . All the same , a quick look at the situation seems  disturbing. The latest data from the Indian Patents Office for the period  Jan - June 1998 ( in terms of patent  applications filed) show that  most of the new quality patents filed in India - almost in all fields -  are by foreign companies based on their R&D abroad . In other words ,  patents emanating from Indian industrial R&D , whether by Indian or non-Indian companies , continue to be insignificant even after a decade of the New Economic Policy regime. One must admit that   Indian industrial R&D , however inadequate,  has grown to  its present level certainly as a result of the promotional efforts of the government , that too essentially during the past decade. But time has come to review the state of the situation once again , a Millenium Review Initiative  by the government , such that appropriate corrective measures are taken without any more loss of time as part and parcel of the New Economic Policy Regime. In other words, there must be an S&T element also in the evaluation/review of the industrialization   programs  and policies of the government. If this is not done in time and with adequate seriousness , the Indian industry may lose even the present level of "expertise for autonomous working"  - as self-reliance is invariably defined - under the thrust of the open economy.