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 wrt 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 quesion
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Bibliographic InfoPaper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 405.
Length: 44 pages
Date of creation: Aug 2008
Date of revision:
Public R&D support; R&D investment; Evaluation; Tax foregone; Innovation policy; R&D policy; R&D investment; Innovation; India;
Other versions of this item:
- Sunil Mani, 2010. "Financing of industrial innovations in India: how effective are tax incentives for R&D?," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 3(2), pages 109-131.
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
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