Research spends have been under pressure as listed companies go slow

Many record zero spending for the latest financial year

While the economic survey has talked about the importance of innovation, some of India’s largest companies have been slowing down on the amounts they dedicate to research and development (R&D).

Spending on R&D grew by 3.4 per cent for 2019-20, shows an analysis of 434 companies from the S&P BSE 500 index with comparable data over the years. Reflecting the pressure on spending over the last few years, many have zero spends. In fact, they spent less money on research for the financial year ending 2020 than they did a few years ago.

The total spends for the companies under consideration was Rs 32127 in 2019-20. It was Rs 33727 crore in 2016-17. Many of the spends come from a few companies. The automobile sector has been a large spender on innovation. Another sector which has contributed larger amounts to over R&D spends is the pharmaceutical industry. Metal and capital goods companies are also amongst the companies which directed amounts in excess of Rs 100 crore on R&D.

Global research and development spends are significantly higher for individual companies. Technology companies and companies in the health and consumer segment can spend an amount in excess of ten per cent of their sales on innovation efforts.