Financing of industrial innovations in India: how effective are tax incentives for R&D?
AbstractThe paper surveys the instruments that are available for innovation financing in India. It identifies three such instruments, namely research grants and loans, venture capital and tax incentives. The effectiveness of all these instruments are then examined in some general fashion, but one of the instruments, namely tax incentives are subject to a detailed empirical scrutiny in terms of its effectiveness. We have constructed a dataset containing firm belonging to four different industries which have claimed these tax incentives. For these firms we estimated the elasticity of R&D expenditure with respect to tax foregone. The resulting analysis showed that while the instruments have been targeted well at the right sort of industries its effect in spurring additional investments in R&D is open to question.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal International Journal of Technological Learning, Innovation and Development.
Volume (Year): 3 (2010)
Issue (Month): 2 (January)
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Web page: http://inderscience.metapress.com/link.asp?target=journal&id=120821
public R&; amp; D support; R&; amp; D investment; evaluation; innovation policy; R&; amp; D policy; research and development; industrial innovation; India; tax incentives; R&; amp; D financing; research grants; research loans; venture capital; R&; amp; D expenditure;
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- Sunil Mani, 2009. "Has India Become More Innovative Since 1991? Analysis of the Evidence and Some Disquieting Features," Working Papers id:2326, eSocialSciences.
- Basant, Rakesh & Mani, Sunil, . "Foreign R&D Centres in India: An Analysis of their Size, Structure and Implications," IIMA Working Papers WP2012-01-06, Indian Institute of Management Ahmedabad, Research and Publication Department.
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