‘Jugaad innovation’ is no more an option, reveals the latest edition of the Economic Survey. It mentioned that the country needs to work more on research and development as mere reliance on jugaad innovation will hamper crucial opportunities in the future.

“Mere reliance on jugaad innovation risks missing the crucial opportunity to innovate our way into the future,” said the survey note.

India ranks 48th among 131 countries for innovation, its highest ever rank. Hence it is important it steps on R&D, the government’s annual pre-budget document on Friday said.

“Indian firms also perform below expectation on innovation for their level of access to equity finance, which is the most crucial for innovation. India must significantly ramp up investment in R&D if it is to achieve its aspiration to emerge as the third-largest economy in terms of GDP. Mere reliance on “Jugaad innovation” risks missing the crucial opportunity to innovate our way into the future. This requires a major thrust on R&D by the business sector,” the survey said.

The survey further adds that of the ten major economies, India’s businesses have the lowest contribution to R&D while it is the government that has to do the heavy lifting.

“India’s gross expenditure on R&D at 0.65 percent of GDP is much lower than that of the top 10 economies (1.5-3 percent of GDP) primarily because of the disproportionately lower contribution from the business sector,” the Survey highlights.

The government expects businesses to produce more patents and original research. It says that it does a disappropriate amount of heavy-lifting on R&D by contributing 56 percent of the gross expenditure on R&D. This is three times the average contributed by governments in the top ten economies.

The Survey also mentioned that startups need to play a key role in fostering innovation and increasing India’s share of patents globally. “The Startup India campaign of the Government of India recognises entrepreneurship as an increasingly important strategy to fuel productivity growth and wealth creation in India. This assumes greater importance in the context of enhancing private participation in innovation in India - in terms of contribution to gross expenditure on R&D, R&D personnel and researchers, and share in patents filed in the country,” the survey said.