however for a firm spending more than of its gross sales on rd the double deduction scheme gave no incentive for increasing rd spending since the firm already enjoyed tax exemption as a result of its hightech status similarly for a firm that undertook investments in a manner qualifying as strategic the double deduction scheme was redundant and thus an ineffective incentive for increasing rd spending in firms wb efforts to diversify production activities and increase training and rd activities and seek greater market penetration into higher value added activities were strengthened with the human resource development act and the creation of the hrd fund hrdf the hrdf was operational in and manufacturing firms with an employment size of or more were required to pay of their payroll to the hrd council which they could then reclaim for approved training expenses