Govt plans to track R&D, software and ICT spending of formal manufacturing firms

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Is innovation driven more by location or by the nature of business? The government may soon be equipped to answer such questions, as it plans to introduce new modules in the Annual Survey of Industries (ASI) 2024-25, aimed at capturing spending on research and development (R&D), software, and information and communication technology (ICT) by formal manufacturing sector firms.

Moneycontrol has learnt that the Ministry of Statistics and Programme Implementation is considering revamping the survey to disaggregate innovation-related spending, which has until now been collected under a single head. The refined categorisation would allow the government to track how much of the capital expenditure in the formal sector goes toward machinery, software, and digital tools separately.

The new approach could help policymakers identify geographic and sectoral trends in innovation spending—such as whether Tamil Nadu or Uttar Pradesh lead on R&D—or determine if higher technology adoption corresponds with job losses in certain industries.

"The ministry is trying to adapt the survey to recent times," said a person familiar with the development.

The survey may also explore whether increased tech investment correlates with employment shifts, such as whether more automated sectors are shedding workers faster than those with lower innovation intensity.

Moreover, the government aims to integrate the ASI data with GST, as firms are required to provide their GSTIN (GST Identification Number) in the survey. This integration will improve the accuracy and timeliness of economic data and help in more robust GDP calculations.

The ASI is a crucial data source used to estimate India's Gross Domestic Product and guides periodic GDP revisions. The government is preparing to announce a new GDP series with 2023-24 as the base year in February 2026, replacing the current base year of 2011-12.

Apart from ASI, the government also conducts surveys of unincorporated enterprises in the informal economy and formal service sector enterprises, providing a comprehensive view of India’s economic structure.