Covid failed to blunt investments in IPR
covid pandemic, when India’s overall investment in fixed assets saw a decline, indicating a heightened focus on innovation within boardrooms, official data showed. Data up to FY22 from the statistics ministry showed that while fixed investments or gross fixed capital formation (GFCF) contracted 7.3% in FY21 due to the economic impact of the nationwide lockdown to contain the spread of covid-19, investments into intellectual property products, a component of GFCF, remained in positive territory.
Some other components of GFCF, too, saw contraction in FY21 before rebounding in the following year. For example, investments into ‘dwellings, other buildings and structures’ faced a near 10% decline in FY21 before rebounding 18% in FY22, and investments into ‘machinery and equipment’ faced a contraction of 6.4% in FY21 before recovering over 12% in FY22.
On the other hand, investment in intellectual property products went against the tide and avoided contraction in FY21 with a 1% growth at Rs5 trillion before expanding further by 6.5% in FY22 to Rs5.33 trillion, showed the figures. Steady investments in IPR indicate that businesses are building intangible assets to bolster their market share and get into more premium products and services when India is trying to carve out a bigger share in the global supply chain.
Experts said this trend is the result of improved connectivity and digitization of the economy. “There is a growing realization that corporate India needs to spend more on research and development as we have been lagging behind many advanced economies in this regard," said Sachchidanand Shukla, group chief economist at Larsen & Toubro Ltd.
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