Boosting Innovation: Calls for Incentives in Upcoming Budget

Nagesh Kumar of RBI's Monetary Policy Committee suggests policy incentives for R&D in the upcoming Union Budget to enhance manufacturing growth. He emphasizes creating an institutional fund for long-term capital and highlights the impact of international trade dynamics on India’s economy.

The Indian government's upcoming budget is anticipated to foster innovation by introducing policy incentives for research and development. Nagesh Kumar, a member of RBI's Monetary Policy Committee, advocates for measures that will strengthen manufacturing-led growth in India.

He emphasizes the necessity of an institutional funding structure to ensure lasting capital availability for industries and suggests the restoration of the 200 percent weighted tax deduction for R&D expenses. Kumar highlights the benefits of a depreciating rupee on exports despite concerns over trade tensions with the US and its tariffs.

With negotiations for trade agreements with the UK and EU progressing, Kumar underscores the significance of domestic reforms and diversification of export markets. The economist also advocates for a detailed review of the production-linked incentive scheme to enhance its effectiveness in various sectors.