New Delhi: Ahead of the Budget, Federation of Seed Industry of India (FSII) on Thursday urged the government to restore 200 percent income tax deduction for in-house research and development (R&D) expenditure in the seed industry.
The income tax deduction for the in-house R&D has been reducing over the last few years. Through an amendment to Finance Act 2016, the weighted deduction was reduced to 150 percent effective from 1 April, 2017 through 31 March, 2020 and it indicated a further reduction to 100 percent from 1 April, 2020.
The Act applies to the eligible companies engaged in the business of bio-technology or in any business of manufacturing or production of any article or thing that incurs any expenditure on scientific research (excluding the cost of land) on in-house R&D facility as approved by the Department of Scientific and Industrial Research (DSIR).
"As compared to developed economies, R&D investment in India is very low and stands at around 0.7 percent of GDP. It cannot be ignored that R&D is critical for new technology development, innovations and to achieve the goal of $5 trillion economy," FSII Executive Director Shivendra Bajaj said in a statement.
The government will have to encourage higher R&D investment to address emerging challenges of climate change, stagnant yields, increase food production and nutrition needs of the country, he said.
Stating that India has the potential to become an export hub for seeds, the FSII said a "conducive policy support" should be provided by the government.
For instance, varieties such as custom production of both genetically modified (GM) and non-GM seeds and production of export-oriented seeds should be exempted from registration, it said.
Registration should be mandatory for seed produced for both domestic and export markets. Export of seed produced in India should be freely allowed without any delays and there should be time-bound approvals from National Biodiversity Authority (NBA) for export of these Indian varieties, FSII added.
It also emphasised on the need to have a national policy on seed exports and setting up of a special cell under the Ministry of Agriculture to deal with export promotion and facilitation such as efficient disposal of export and import permits.
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Updated Date: Jan 23, 2020 18:18:47 IST