Indian Corporate Investment: R&D Deficiency Hinders Global Competitiveness

The Economic Survey highlights the lack of research and development investment in Indian corporates, focusing on real estate and quasi-monopolistic sectors. The private sector's role in nation-building and its need for long-term risk absorption is emphasised, urging a shift toward innovation, skills, and productivity.

The Economic Survey reveals a significant concern regarding Indian corporate investment, which is chiefly characterized by a low intensity in research and development. Predominantly concentrated in real estate-linked and quasi-monopolistic sectors, Indian companies show reluctance towards investing in long-term risk absorption to attain global competitiveness.

The Survey emphasizes the private sector's crucial role in contributing to nation-building amidst rapid societal changes. It underlines the necessity for Indian businesses to integrate commercial vitality with national development goals, drawing parallels with historical examples from the U.S., Germany, and Japan.

According to the Survey, the reliance on regulatory arbitrage and political mediation over productivity and competition impedes institutional growth. It calls for companies to accept longer investment horizons for innovations, skills, and quality, urging business leaders to embrace global competition standards and reinvest in capabilities rather than mere financial gains.