Committee set up by NITI aayog suggests US-style grand prizes to boost innovation

NEW DELHI: India could soon emulate the United States in instituting grand prizes to encourage innovation in the country if the recommendations of the Tarun Khanna-led expert group are accepted.

Finance minister Arun Jaitley had in his budget speech for 2015-16 announced the government’s intention to establish the Atal Innovation Mission (AIM) in NITI Aayog and allocated an initial sum of Rs 150 crore to promote a culture of entrepreneurship and innovation. The Aayog later set up a committee under Professor Tarun Khanna to suggest an umbrella structure of AIM which will oversee innovation ecosystem in the country.

In a comprehensive report submitted to the Aayog recently, the committee recommended a three-layered pyramid structure to fundamentally and sustainably boost entrepreneurship in India with focus on providing adequate support to early-stage ventures, creating an enabling environment for innovation and attaching entrepreneurship to large-scale economic and social programmes.

"The committee recommends a ‘grand prizes’ approach to finding ultra-low-cost solutions to India’s most intractable problems," the report said. Incentivised innovation has worked around the world in stimulating innovation, the report said, citing the example of the US and a similar practice adopted by Infosys in India.

The committee recommended that the government give tax benefits to companies willing to invest 1% of their profit towards research labs in universities. It also suggested that all contracts with foreign defence companies above $5 billion include a clause for 5% of contract value to be directed to establish research centric universities with strong emphasis on its core product areas in particular and broadly focused on the related areas in general, thus harnessing corporate funds to finance research and development. Besides, a ‘Make in Universities’ programme, which will involve setting up 500 tinkering labs with one 3D printer per institute and trained people to operate this can be introduced across the country, including in smaller cities, to boost the spirit of production and collaboration, the report said.

The committee further recommended that the one-time budget allocation of Rs 1,000 crore to SETU (self-employment and talent utili sation) should be used to jumpstart innovation through two concrete initiatives at scale. "We recommend, for example, that half of the Rs 1,000 crore be spent in upgrading the system of incubators already in place in the country and to award the majority of the Rs 500 crore to the best ten incubators, publicly or privately funded, with the proviso that they will be held accountable for the efficacy with which the funds are spent,” the report said.

The committee said that the remaining Rs 500 crore of SETU money should be used to set up tinkering labs, which will be centres that will permit aspiring entrepreneurs to experiment to create products that address local problems. As per the recommendations, the vice chairman of NITI Aayog shall serve as the chairman of AIM board, with seven secretary level officers from related ministries appointed as directors on the board.

While only four of them will have voting rights, the committee recommended appointment of four outside independent directors with voting rights to be chosen by the government from outside. With this structure in place, private and public sector directors will have an equal number of votes, the committee said.