New Delhi, Jan 18: For the upcoming Union Budget, Federation of Seed Industry of India (FSII) has urged the Centre to restore the 200 per cent income tax deduction, higher Research and Development investment and a conducive policy support from the government.
The Federation suggested that the Government should restore the 200 per cent income tax deduction (under the section 35 (2AB) of the Income Tax Act, 1961) for the in-house Research and Development (R&D) expenditure in seed industry.
The Act applies to the eligible companies engaged in the business of biotechnology or in any business of manufacture or production of any article or thing that incurs any expenditure on scientific research (excluding the cost of land) on in house research and development facility as approved by the Department of Scientific and Industrial Research.
The income tax deduction for the in-house R and D has been reduced over the last few years. Through an amendment as per Finance Act 2016, the weighted deduction was reduced to 150 percent effective from April 1, 2017 through March 31, 2020 and it indicated a further reduction to 100 per cent from April 1, 2020.
FSII Executive Director Dr Shivendra Bajaj said, 'As compared to developed economies, R and D investment in India is very low and stands at around 0.7 per cent of GDP. It cannot be ignored that R and D is critical for new technology development, innovations and to achieve the goal of USD 5 trillion economy.
The government will have to encourage higher R and D investment to address emerging challenges of climate change, stagnant yields, increase food production and nutrition needs of the country, he maintained.
Countries like Chile, Argentina and South Africa dominate the global seed trade as they have positioned themselves as suppliers of reliable quality of seeds.
India too has a well-developed seed industry, varied agro climatic conditions, seed production expertise and the necessary infrastructure which can make India a global seed export hub, the Federation said. (UNI)