India, Aug. 19 -- India stands at a pivotal moment in its economic journey. As the world enters an era defined by AI, quantum computing, biotechnology, advanced materials, clean energy and deep-tech innovation, the nations that lead in research and innovation will shape the global economy of the future. India aims to become a developed economy by 2047. Achieving this goal will requiresustained investment in knowledge creation, scientific discovery and technological innovation. But if innovation is to defineIndia's growth story, we need to revisit afundamental question: How do we think of investment in innovation? For much of the industrial age, capital was synonymous with physical assets - factories, machinery and infrastructure. These remain important. But in the knowledge economy,an equally important form of capital isintellectual capital, createdthrough research, innovation and technological development. Should investments that create future intellectual assets be viewed differently from ordinary operating expenses, then? When a company builds a factory or installs a new production line, the expenditure is treated as capital investment. It creates an asset that is recognised on the balance sheet and depreciated over time. Yet when that same company invests in developing a novel biologic, an AI platform, a quantum computing architecture or another breakthrough technology, the expenditure is largely treated as a current cost. In many ways, this distinction reflects an earlier era. Traditional capital expenditure creates tangible assets. R&D creates intellectual assets. Both involve deploying capital today in anticipation of future economic returns. When a company invests Rs.1,000 crore in developing a breakthrough product or technology, it is creating capabilities and intellectual property that may generate value for decades. Indeed, the market value of many of the world's most successful companies is derived not from physical infrastructure alone, but from patents, algorithms, data assets, software platforms and proprietary know-how - outcomes of sustained research investment. We now need to examine whether our financial frameworks can evolve to better reflect this reality. India should explore whether future revisions to Indian Accounting Standards (Ind AS) can provide a more enabling framework for innovation-intensive industries. One approach could be to allow qualifying R&D investments to be capitalised and amortised over an appropriate period, supported by rigorous eligibility criteriaand transparent disclosures (clearlydefined research programmes, demonstrable technical milestones, independent audit and certification, board-approved innovation investment plans, and transparent reporting of outcomes and risks, among others). This ensures that only genuine innovationinvestments qualify while preserving the integrity of financial reporting. Aligning accounting treatment more closely with economic reality would enable company boards to pursue long-term innovation strategies with greater confidence and discipline. India's gross expenditure on R&D as a percentage of GDP has remained at roughly 0.7% for many years, compared with a global average of around 1.8%. Leading innovation economies such as South Korea (4.9%), the US (3.5%) and China (2.6%) invest significantly more. Many of these countries have designed fiscal frameworks that actively encourage research investment.China provides a 75-100% weighted deduction on qualifying R&D expenditure and a reduced corporate tax rate of 15% for high-technology enterprises. The US offers R&D tax credits linked to incremental research spending- a policy that has survived successive rounds of tax reform because of its proven effectiveness. The UK provides a 12% R&D tax credit on qualifying expenditure in addition to a 100% deduction, while Ireland offers a 37.5% R&D tax credit as a cash refund - with no sunset clause - contributing to one of Europe's most vibrant innovation ecosystems. Countries competing for leadership in science and technology are also competing for research capital. India, too,must create a policy environment that encourages long-term investmentin innovation. Reintroducing a 200%weighted tax deduction for qualified R&D expenditure undertaken in India would send a strong signal that research and knowledge creation are national priorities. Such a measure would encourage greater private-sector investment, attract global research activities, accelerate commercialisation of indigenous technologies and strengthen India's scientific competitiveness. The future will belong to nations that treat knowledge creation as a form of capital formation. India has every opportunity to be one of them....