Introduction

Policies that facilitate innovation in general and innovative performance in domestic industry in particular are an integral part of the development policies pursued by most countries. If the available evidence is any indication, India has been no exception. Both in terms of the institutional arrangements evolved over the years and of policy initiatives, India stands head and shoulders above developing country standards and in some respects is even on a par with some of the developed countries. Indian policymakers, particularly in the early years of independence, highlighted the crucial role of technology in addressing the development problems in the country and underscored the role of domestic generation of technology. The policies on technology imports in general, although initially liberal, were subsequently made restrictive for both embodied and disembodied imports to stimulate enterprises to take up and improve technology. Accordingly, almost all the policies formulated over the first forty years – including the policy statements exclusively for science and technology and others relating to industry, trade, investment and fiscal measures – were intended to influence either domestic generation or imports of technology or both. Apart from establishing its own agencies to promote innovation, the government encouraged the private sector, with the aid of various policy measures, to engage in in-house R&D activities. Also, with a view to promoting dissemination of technology, especially in agriculture, appropriate policy measures and other institutional action were taken from time to time.