Know-How Investment Proposal Hailed By Science Chiefs

NEW DELHI: Top Indian scientists have hailed the 1997-98 budget proposal to allow national research institutes to invest their know-how as equity in private sector companies, terming it as a ''right step'' towards boosting industry participation in research and development.

The announcement of 'Swarnajayanti' fellowships for outstanding scientists below 45 years too has been welcomed as a "confidence building exercise" to boost the sagging interest in basic science, especially among students.

Finance Minister P Chidambaram had announced February 28 that government-promoted societies, recognized by the Department of Scientific and Industrial Research (DSIR), will be allowed to invest their knowledge and know-how as their equity in a private sector company.

This means that Research and Development (R and D) laboratories can be equity partners and own shares in private companies that have purchased their technology.

This is a departure from the normal practice of industries paying a premium (down payment) plus royalty on technology purchased from a laboratory. Instead of demanding a one-time payment, labs now have a choice of being equity partners in a private company.

Hailing the budget as "one of the most scientist and science-friendly budgets in recent times," Dr RA Mashelkar, Director General of the Council of Scientific and Industrial Research (CSIR) said labs can now participate in setting up a new venture along with a private sector company.

With this step, the finance minister is trying to improve business spirit among scientists and promote entrepreneurship in them, Dr Mashelkar told PTI.

Welcoming the proposal as ''very good initiative'', Dr VS Ramamurthy, Secretary, Department of Science and Technology (DST), said such a concept has been existing for long in countries such as the US.

The proposal gives an additional bargaining option to an R and D laboratory, in case some industries are hesitant about buying a technology after outright payment.

By becoming partners on a continuing basis, the labs can now take part in technology commercialization and share both profits and losses, a step that will boost industry's confidence in adopting an indigenous technology, Dr Ramamurthy said.

It will also ensure the laboratory's involvement in upgradation and ensuring commercial viability of their technology.

The step is likely to benefit knowledge-based small-scale industries rather than large scale manufacturing industries, Dr Ramamurthy pointed out. (PTI)

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