- Prelims:Current events of national importance, CSR, high net worth (HNI) tax, 5G etc
- Mains GS Paper II and III:Development process and the development industry-the role of NGOs,SHGs etc
ARTICLE HIGHLIGHTS
- The Prime Minister is making a concerted push for self-reliance in military technology, semiconductorsand science-based businesses.
INSIGHTS ON THE ISSUE
Context
National Investment and Infrastructure Fund(NIIF):
- NIIF is a government-backedentity established to provide long-term capital to the country’s infrastructure sector.
- The Indian government has a 49% stake in NIIF with the rest held by foreignand domestic
- NIIF is considered India’s quasi-sovereign wealth fund.
- It was set up in 2015 as a Category-II Alternative Investment Fund.
- Across its three funds: Master Fund, Fund of Funds, and Strategic Opportunities Fund, it manages over USD 4.3(four point three)billion of capital.
Present technology battlegrounds:
- Semiconductors
- 5G
- Revolutions in biology
- Autonomy
Vulnerabilities to these technologies:
- Military conflict
- Health emergencies
- Natural disasters
Dual use of deep Technology: For example, position navigation timing technology such as GPS is needed for Google Maps and Uber but is also an extremely important aspect for fighter jet navigation and missile systems.
Role of funding:
- Allows startups to emerge as a bridge: Between benchtop prototypes of academia and production-hungry large industry.
- In the United States, Israel and North Atlantic Treaty Organization countries: Government is the largest source of funds for Deep Tech.
- Intellectual property:cutting-edge, quantum jump in capability creates an intellectual property.
- Funding flows through agencies: such as the Defense Advanced Research Projects Agency, the Directorate of Defense Research etc which becomes the oxygen for small businesses to survive.
India’s Stand:
- Government of India is changing with the launch of:
- Indian Semiconductor Mission
- Ministry of Defense’s flagship iDEX and TDF schemes
Avenues to build patriotic capital:
CSR budgets:
- Annual CSR budget is ₹15,000 crore, of which a substantial portion goes unutilised.
- CSR has traditionally been utilized for the social sector: However, this growing corpus should also be used for the development of strategic technology.
- Large corporations can be incentivised: To use some of this budget to serve the strategic needs of the nation.
- Strategic tech startups: The Government should allow these funds to flow into certain strategic tech startups.
High net worth (HNI):
- HNIs can also be offered tax incentives: To make equity investment in the same critical technology startups.
- Short term returns: It will help mitigate the pinch felt with lower short-term returns.
- Tax deductible: The corpus of investment should be tax deductible and no more than a certain percentage of annual income.
Way Forward
- World class deep tech: In order to become a developed country in 25 years, India will need to build world-class deep tech capabilities in certain sectors.
- Certain innovations: In the existing corporate social responsibility (CSR) budgets and high net worth (HNI) tax breaks will incentivise capital flowing into strategic tech.
- Be your commercial industry: India needs to be cognisant of the fact that strategic technology cannot become the burden of commercial industry alone.
- The pool of investable companies: They must be limited to Government of India-recognised start ups.
- startups should have funding or ‘acceptance of necessity’ granted from the Indian military/Ministry of Defence.
- Atma Nirbhar: If it is correctly aligned with the programmes launched by the Government, CSR funds and the right tax incentives to HNIs can create an almost self-fulfilling prophecy in the nascent Indian Deep Tech ecosystem.
QUESTION FOR PRACTICE
- How is the S-400 air defense system technically superior to any other system presently available in the world ?(UPSC 2021)
(200 WORDS, 10 MARKS)
