The Union government has made research and development (R&D) mandatory for all profit-making Central Public Sector Enterprises (CPSEs) with immediate effect.
The Department of Public Enterprises (DPE), under the Ministry of Heavy Industries and Public Enterprises, has, in a memorandum, directed that Maharatna companies set aside at least 1 per cent of their profit after tax (PAT) for expenditure on R&D and other Navratna status undertakings earmark 0.5 per cent of their PAT for the purpose.
Loss-making, sick and those on revival package have been exempted from this.
To make their operations R&D-driven and brace up to compete with low-cost products of emerging markets, the Maharatna PSUs have been assigned to take up at least five R&D projects while the Navratna companies will necessarily undertake three R&D jobs.
The DPE will set up a National R&D Hub to compile and document their activities, organise national and international seminars and collaborate with external agencies to set up a think-tank on R&D. It intends to set up a corpus fund with the twin purpose of financing these activities and receiving funds too from various agencies.
The CPSEs have been directed to draft an R&D policy, appoint a director or committee to plan the R&D project, approve the budget for the next three years and specify the objectives and targets and the monitoring process.