TOP 100 INDIAN FIRMS SHOULD PUT 10% PROFITS INTO CSR: MURTHY
Infosys founder N R Narayana Murthy said the top 100 Indian companies should allocate 10 per cent of their profits towards corporate social responsibility (CSR) as part of the private sector contribution towards science and research.
“As against the current 2 per cent of profits earmarked for CSR, I would sit down with the CEOs (chief executive officers) of all the top 100 companies and say would they accept a situation where another 2 per cent goes for research, maybe another 2 per cent goes for public health, the fourth 2 per cent goes for nutrition of poor children, maybe the last two per cent goes for primary education or something like that,” Murthy said here on Wednesday. “So, 10 per cent of our net profits, if we can contribute towards making this a better society, I feel all of us will be much happier.”
Murthy, a trustee of the Infosys Foundation, made these comments at a panel discussion with Business Standard, on the sidelines of the Infosys Science Foundation event. Pradeep K Khosla, chancellor, University of California, San Diego, and jury chair for Infosys Prize in Engineering and Computer Science category; and Upinder S Bhalla, professor and dean, National Centre for Biological Sciences, and winner of the Infosys Prize in Life Sciences, were also part of the panel discussion.
On the private sector’s role in Indian science and technology research, Murthy said: “Because, let us be very clear, being rich in a poor country is not much fun. This may seem a little bit outlandish, but I think these are the kind of discussions we must have.”
The department of science and technology (DST) had on December 29 said India’s research and development (R&D) expenditure as a percentage of gross domestic product (GDP) was 0.69 per cent in 2014-15. This despite the gross expenditure on R&D (GERD) tripling in a decade to ~853 billion in 2014-15 from ~242 billion in 2004-05. The GERD estimate for 2016-17 was ~945 billion and would increase to ~1 trillion this fiscal year, it said.
Murthy also emphasised the need to bring more people under the tax net so that the government can increase R&D spending.
“The second issue is again somewhat controversial,” he said. “If you look at the highest marginal tax rate in India, it’s about 30 per cent. If you compare it with Scandinavian countries and if you compare it with the UK, Europe, even in the US when you combine the federal and state taxes, they are higher. So, if this country has to make significant progress in reducing inequality, we have to improve the contribution to GDP from our taxation from the current 11.5 to somewhere around 16-18 per cent. That can only be done by ensuring that the tax rates at the highest marginal levels are increased and, perhaps, by bringing in more people into the tax net. The reality is this. Unless you have money, there’s no way you can solve these problems.”
Khosla, who manages over $5 billion in resources at UC San Diego, said India should build more world-class institutions and improve the confidence of industry to fund R&D projects.
“The best way for a university to get funding is to have quality that creates confidence in private investors like Mr Murthy, Mr (Ratan) Tata, Mr (S) Gopalakrishnan. They have done well in industry but when they give money to universities, they are investing. They are not throwing that money away either in science or the future of education. And to make that investment, they have to have confidence that it is a quality institution with quality management, with a quality vision that they can share,” said Khosla.
“There’s not enough institutions for the size of this country. Having one Indian Institute of Science (IISc) or one Tata Institute of Fundamental Research (TIFR) is not good enough for this country. This country requires 20 IISCs, 10 TIFRs and 10 National Centres for Biological Sciences (NCBSs). That’s the size of this country.”
Bhalla, who won the Infosys Prize in Life Sciences, said researchers in India would do wonders if the country empowered and enabled them to work with industry or build start-ups.
“We’d love for them to come. Lower the barriers and amazing things will happen. There are so many people with amazing ideas out there but they get enmeshed. They get put off by unnecessary difficulties in doing things, ranging from their ability in founding companies, legal things, permissions. We have to do things by the correct process, but the process should not be 90 per cent of the effort,” he added.