The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has sought policy actions to connect science to industry which will increase future jobs in manufacturing to an extent of 30 million by 2015-16.

Connecting science to industry will, however, require India to substantially enhance its R&D spent from existing level of 1% of its GDP to over 4% and incentivise Indian firms sufficiently to create projected levels of jobs since 80% of Indian firms spend nothing on research.

Within the manufacturing sectors, textile and food products, beverage, transport equipment, metal and leather products, and machinery are expected to contribute the major part of increase in employment, reveal the chamber assessment.

In a communication to the government, action should be taken for amalgamation of science with industry the way china did it to increase its spend three times more on R&D as compare to India.

While Indian scientists publish over 19,000 papers, their Chinese counterparts a whopping 50,000 papers. China has become a world leader in the number of chemistry patents and grown by 1400%. India employs 120 people in R&D per million of the population compared to 633 for China.

Many of our science graduates are not employable as they lack training on hi-tech research equipment. The challenge is to connect Indian science with industry needs. Therefore, actions must be taken quickly to connect higher education to industry needs.

In addition, India also needs transparent and fair IPR regime, education of the judiciary on patent law and encouragement to invest in R&D through tax breaks.

In regard to taxation, transaction costs are high in manufactured goods. GST has been adopted by more than 140 countries and India still lags behind. The VAT implementation caused disruptions and inefficiencies as States keep changing their VAT rates.

Similarly States will have to agree to a common system without deviation for each States goals. Indian industry is looking forward to the implementation of GST, which will make Indian industry more competitive.

The Minimum Alternate Tax (MAT)  has proposed, is more in the nature of wealth tax to be paid by even loss making companies, companies yet to start business and on assets yet to be put to use.  This will have a significant impact on the cash flow, thereby hurting fiscal growth especially for research based / capital intensive /infrastructure companies with a long gestation period. This will also have a severe cascading effect for group companies since the same investment/ asset will repeatedly get taxed. If debt is not deducted for assets based tax, even debt will be taxed more than once, in the hands of borrower and lender. An analysis of the Code reveals that it will affect the tax liabilities of all sections of society, particularly the salaried class, NPOs / charitable trusts, foreign investors and the corporate sector.

Indian industry also wants an efficient, equitable, fair and transparent Tax Code at par with the best international practices with smooth implementation across the country.