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Hindustan Times
07-07-2025
- Business
- Hindustan Times
Innovation needs State as much as the private sector
From Moon landings to mRNA vaccines, many breakthroughs were seeded by governments willing to do what markets could not. Yet today, the State is often told to step aside and let the private sector lead. This creates a paradox. Governments are blamed for not innovating, yet also told not to try. At the same time, many private firms have shifted from building to optimising. Instead of investing in research or transformational ideas, they focus on quarterly targets and stock buybacks. Innovation has become a buzzword rather than a behaviour. True innovation ecosystems need both sides. They emerge when governments stop acting like cautious regulators and become mission-driven investors. They grow when businesses take risks and focus on long-term value. The world's most iconic innovations are rarely the work of lone entrepreneurs. They are the outcome of public ambition meeting private execution. Apple's success owes much to State-led innovation. Technologies like GPS, touchscreens, and the internet began with Darpa funding when private investors stayed away. Finland followed a similar approach. SITRA, its public funding agency, retained equity in early investments in Nokia. In the 1960s, South Korea picked automobiles, where it had no advantage, and used State support and learning-by-doing to turn Hyundai into a global brand. China, seeing it could not win with combustion engines, bet early on EVs. It backed firms, secured minerals, and shaped demand through procurement. Today, it makes 60% of the world's EVs. India must remember these lessons as it builds its own innovation engine. The government has made moves through Production Linked Incentives (PLI) schemes, digital public infrastructure, and missions in quantum and semiconductors. But many efforts stop at subsidies or tax breaks. What is missing is the confidence to lead. Mission-driven innovation needs the State to go beyond funding and shape markets with clear goals, coordinated capital, and long-term commitment. This means supporting grand challenges with patient capital and strong institutions. It also means reforming procurement to reward risk, building public R&D that works with industry, and turning innovation into a national drive. The real risk is doing too little. India has the talent and ambition. But without a State that acts like a venture capitalist with a public purpose, we will keep mistaking jugaad for innovation and miss the chance for global leadership. For this engine to truly fire, the private sector cannot be a passenger. It must become a co-pilot. The private sector's role in scaling and commercialising innovation is essential. Amazon reshaped logistics. Moderna turned public mRNA research into a vaccine within months. In South Korea, State support helped Samsung and LG shift from copying to creating. India's private sector is still catching up. Some firms are global leaders in services and frugal engineering, but the overall picture is sobering. Private R&D spending is just 0.3% of GDP. China spends 5X more, and countries like South Korea and Germany invest even more. Outside a few examples like Tata Motors with the Nano, Serum Institute's vaccines, or Biocon's biosimilars, innovation is still treated as a cost, not a strategy. This gap is not about lack of talent. It is about incentives, time horizons, and mindset. Many Indian firms chase quick returns, rely on imported technology, and underinvest in research. But innovation needs patience, close ties with universities, and the courage to accept failure. What can change this? First, shift from imitation to invention. Being cost-effective is not enough without unique intellectual property. Second, focus on India-specific problems like rural fintech, climate-resilient crops, and energy-efficient manufacturing. Third, build strong partnerships with public institutions to shape future markets, not just for CSR. Innovation is a business model. The sooner we realise that, the faster we can move up the value chain. If we want innovation-led growth that is smart and inclusive, we must stop treating the State as a passive regulator and the private sector as the only entrepreneur. The real economy is not a casino where public institutions absorb losses and private actors pocket gains. A truly entrepreneurial State does not just fund risk, it demands a fair share of reward. A responsible private sector does not just seek tax breaks and regulatory holidays, it invests in long-term capacity that creates public value. What we need is a new risk-reward compact, as Mariana Mazzucato puts it. One that acknowledges the collective effort behind innovation and ensures benefits are more broadly shared. This is not about capping profits. It is about recognising that innovation is a team sport and designing systems that reward the team, not just the star striker. Breakthroughs co-created, not the unicorn count, will define India as an innovation power house. Lloyd Mathias is an angel investor and independent director and Harsh Lailer is with the Quality Council of India. The views expressed are personal.
Hans India
01-07-2025
- Business
- Hans India
Backbone of rising India
New Delhi: Prime Minister Narendra Modi on Monday highlighted the growing strength of India's steel industry that is playing a key role in propelling the country's infrastructure, defence, electric mobility and clean energy sectors. Referring to Steel Minister H D Kumaraswamy's post on X about how India's policy push and innovation are shaping the country's journey to becoming a global steel leader, the Prime Minister, in a post on X, wrote: "From infrastructure and defence to electric mobility and clean energy, steel is the backbone of a rising India. Union Minister HD Kumaraswamy outlines how policy push and innovation are shaping India's journey to becoming a global steel leader". Kumaraswamy said: "A revitalised steel sector is shaping the rise of a New India. From highways to high-speed rail, metro networks to renewable parks, EVs to defence, Indian steel is at the heart of our infrastructure revolution". The minister further stated that under Prime Minister Modi's leadership, India has emerged as the world's 2nd largest steel producer. Steel production has nearly doubled since 2014, and we are fast moving towards our 2030 target of 300 MTPA, he said. "Through visionary reforms like the domestically manufactured iron & steel products policy and Production Linked Incentives scheme, we have boosted capacity, self-reliance, and green steel innovation," he observed. "Today, India exports quality steel, builds with its own strength, and empowers MSMEs and core industries. This is Atmanirbhar Bharat in action. Steel is not just metal. It is the backbone of a rising, resilient India," Kumaraswamy added. He also wrote in a media article that a new Bharat is rising, and at the very foundation of this rise stands steel, a sector that was earlier stagnant but is now forging ahead.
Hans India
06-06-2025
- Business
- Hans India
AP showcases investment potential in electronics manufacturing
Tirupati: Andhra Pradesh is fast emerging as a prime destination for investments and industrial growth, especially in the electronics manufacturing sector. The Electronics Component Manufacturing Scheme (ECMS) and Andhra Pradesh Electronics Component Manufacturing Policy draft workshop in Tirupati held on Thursday was aimed at giving a further boost to this sector. The one-day workshop was jointly organised by the IT, Electronics & Communications (ITE&C) Department, AP Economic Development Board, and the India Cellular and Electronics Association. The workshop saw participation from key dignitaries including Sushil Pal, Joint Secretary of the Ministry of Electronics and IT, who stated that the Government of India is actively promoting electronics component manufacturing through Production Linked Incentives (PLI) and other incentives. He lauded AP's proactive efforts and underlined the strong demand for electronics components in the market. Speaking at the event, Secretary of ITE&C Bhaskar Katamneni highlighted that the state government under the leadership of the Chief Minister is committed not only to 'Ease of Doing Business' but also to 'Speed of Doing Business.' He emphasised the abundant opportunities in the state for setting up industries and expressed confidence that Andhra Pradesh is crafting a more competitive and investor-friendly electronics policy compared to the Central Government's framework. Bhaskar revealed that the state is aiming to localise production of electronic components, which are currently being imported, and is formulating a forward-looking policy to attract manufacturers. Plans are already underway to establish 25 percent of these units in the southern Rayalaseema region. Tirupati EMC-2 cluster and the Kopparthy EMC are being positioned as key hubs for this expansion. Highlighting the state's industrial readiness, he mentioned Sri City, where more than 200 industries are operational and contributing to significant employment. Andhra Pradesh boasts superior infrastructure with robust road, rail, airport, and port connectivity. Reaffirming the state's commitment to transparency and technological governance, he said Andhra Pradesh is leveraging AI, IoT, drones, and WhatsApp governance for effective administration. As the state works toward its Vision 2047 goal of becoming a $2.4 trillion economy, it aims to harness not just IT but a range of industrial sectors to meet national targets.
Time of India
28-05-2025
- Automotive
- Time of India
EV two-wheeler sales soared 34x in 4 years, but market share stuck at 4%: Study
Electric vehicle (EV) sales in India have grown rapidly across segments in the last decade, but adoption rates remain modest despite significant fiscal support, a new study by the Institute for Energy Economics and Financial Analysis (IEEFA) has found. The report, From Incentives to Adoption, presents a 10-year review (2014–2023) of government subsidies and policy interventions under FAME-I, FAME-II, Production Linked Incentives (PLI), and state schemes, and assesses their effectiveness across five EV segments. In the electric two-wheeler (E2W) segment, sales jumped from 19,333 units in FY2019 to over 6.5 lakh units in FY2023. However, the adoption rate – the share of electric vehicles in overall two-wheeler sales – was only 4% by the end of 2023. 'FAME-II's higher subsidy intensity (28.65%) compared to FAME-I (14.32%) boosted absolute E2W sales by up to 9 times, but had limited impact on the overall market composition,' the report states. According to Charith Konda, Energy Specialist at IEEFA and one of the co-authors, 'The government should continue offering purchase subsidies to sustain momentum but clearly communicate a phased-down trajectory for the longer term.' In the electric three-wheeler passenger (E3WP) segment, early policy support under FAME-I drove a 10x market multiplier effect. Around 27,000 additional vehicles were directly attributed to subsidies under FAME-I, with total sales reaching 2.67 lakh units by March 2019. The segment, however, matured during the FAME-II period and showed limited incremental impact from later subsidies. The electric three-wheeler cargo (E3WC) category saw a market share rise from 0.03% in 2015 to over 31% by 2023. The study found this growth was largely driven by operating cost advantages rather than central subsidies. A 1% reduction in operating cost led to a 0.563% increase in sales, highlighting the role of business economics in commercial segments. In the electric four-wheeler commercial (E4WC) category, sales improved after FAME-II and PLI schemes were implemented. A one-standard-deviation increase in subsidy intensity led to a 5% rise in sales. However, the adoption rate was still less than 1%. States that implemented incentives saw 211% higher sales growth than those that did not. For electric four-wheelers in the private segment (E4WP), sales grew due to new model launches and consumer demand, but adoption rates remained below 2%. The report highlights the need for continuing support in this segment. The report found that both FAME-I and FAME-II failed to make a statistically significant impact on electric bus (e-bus) adoption. Only 4,766 units were subsidised against a target of 7,262, and the sector continues to face structural barriers such as limited financing access and high upfront costs. 'Coordinated central and state action, pairing targeted purchase incentives, infrastructure rollout, and manufacturing scale-up can help electric cars compete effectively with their counterparts in India's commercial vehicle market,' said Saurabh Trivedi, Sustainable Finance Specialist at IEEFA. The study recommends continued fiscal support, investment in public charging infrastructure, interest rate subvention for buses, and targeted financing support for smaller commercial operators. 'As India transitions from FAME schemes to PM E-DRIVE and other similar initiatives, policymakers must recognise that each EV segment requires tailored intervention,' Konda added. The report draws on panel data of 21,526 observations over 10 years, offering a first-of-its-kind empirical assessment of India's EV subsidy performance using econometric techniques such as difference-in-differences and synthetic control methods.
Time of India
28-05-2025
- Automotive
- Time of India
EV two-wheeler sales soared 34x in 4 years, but market share stuck at 4%: Study
New Delhi: Electric vehicle (EV) sales in India have grown rapidly across segments in the last decade, but adoption rates remain modest despite significant fiscal support, a new study by the Institute for Energy Economics and Financial Analysis (IEEFA) has found. The report, From Incentives to Adoption, presents a 10-year review (2014–2023) of government subsidies and policy interventions under FAME-I, FAME-II, Production Linked Incentives (PLI), and state schemes, and assesses their effectiveness across five EV segments. In the electric two-wheeler (E2W) segment, sales jumped from 19,333 units in FY2019 to over 6.5 lakh units in FY2023. However, the adoption rate – the share of electric vehicles in overall two-wheeler sales – was only 4% by the end of 2023. 'FAME-II's higher subsidy intensity (28.65%) compared to FAME-I (14.32%) boosted absolute E2W sales by up to 9 times, but had limited impact on the overall market composition,' the report states. According to Charith Konda, Energy Specialist at IEEFA and one of the co-authors, 'The government should continue offering purchase subsidies to sustain momentum but clearly communicate a phased-down trajectory for the longer term.' In the electric three-wheeler passenger (E3WP) segment, early policy support under FAME-I drove a 10x market multiplier effect. Around 27,000 additional vehicles were directly attributed to subsidies under FAME-I, with total sales reaching 2.67 lakh units by March 2019. The segment, however, matured during the FAME-II period and showed limited incremental impact from later subsidies. The electric three-wheeler cargo (E3WC) category saw a market share rise from 0.03% in 2015 to over 31% by 2023. The study found this growth was largely driven by operating cost advantages rather than central subsidies. A 1% reduction in operating cost led to a 0.563% increase in sales, highlighting the role of business economics in commercial segments. In the electric four-wheeler commercial (E4WC) category, sales improved after FAME-II and PLI schemes were implemented. A one-standard-deviation increase in subsidy intensity led to a 5% rise in sales. However, the adoption rate was still less than 1%. States that implemented incentives saw 211% higher sales growth than those that did not. For electric four-wheelers in the private segment (E4WP), sales grew due to new model launches and consumer demand, but adoption rates remained below 2%. The report highlights the need for continuing support in this segment. The report found that both FAME-I and FAME-II failed to make a statistically significant impact on electric bus (e-bus) adoption. Only 4,766 units were subsidised against a target of 7,262, and the sector continues to face structural barriers such as limited financing access and high upfront costs. 'Coordinated central and state action, pairing targeted purchase incentives, infrastructure rollout, and manufacturing scale-up can help electric cars compete effectively with their counterparts in India's commercial vehicle market,' said Saurabh Trivedi, Sustainable Finance Specialist at IEEFA. The study recommends continued fiscal support, investment in public charging infrastructure, interest rate subvention for buses, and targeted financing support for smaller commercial operators. 'As India transitions from FAME schemes to PM E-DRIVE and other similar initiatives, policymakers must recognise that each EV segment requires tailored intervention,' Konda added. The report draws on panel data of 21,526 observations over 10 years, offering a first-of-its-kind empirical assessment of India's EV subsidy performance using econometric techniques such as difference-in-differences and synthetic control methods.
