Taking the evidence from countries like South Korea, the U.S., and Germany, where the presence of private players is quite evident, the report noted that public expenditure is productive up to some extent; once the growth follows a trajectory, it is desirable to shift to R&D mostly drive by the private sector.

“Therefore, it is important for India to find that inflexion point after which private sector takes over the government sector,” it said.

The report also noted that the country has not performed well in the knowledge worker pillar, as much as it has in the human capital pillar. “...the expenditure on human capital has been unable to create that knowledge base in the country…Moreover, it was also observed that innovation is skewed against the manufacturing sector due to the problems pertaining to and the missing middle. This requires inexorable efforts to overcome challenges and make the best use possible,” it said.

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