India’s R&D Funding – An Analysis

India’s R&D Funding – An Analysis

Context: The announcement in the interim Budget for 2024-25 of a corpus of ₹1 lakh crore to bolster the research and innovation ecosystem within the country, has sparked enthusiasm within the scientific and research communities.

India’s R&D status:
 Gross Expenditure on Research and Development: India’s R&D is witnessing significant growth, with a notable increase in GERD from ₹6,01,968 million in 2010-11 to ₹12,73,810 million in 2020-21. 
 R&D Investment as % of GDP: However, with research and development investment as a percentage of GDP standing at 0.64%,India falls behind major developed and emerging economies such as China (2.4%), Germany (3.1%), South Korea (4.8%) and the United States (3.5%).
 Academic talent: Annually, India generates an impressive 40,813 PhDs and is in third place after the United States and China.
 Patent Grants: India also demonstrates commendable performance in patent grants, securing the sixth position globally with 30,490 patents granted in 2022.
 Substantial research output as part of R&D investment: India ranks third position globally in terms of scientific and research publication, with over 3,00,000 publications in 2022.

Negative status of India’s R&D Funding:
 Low R&D investment as percentage of GDP: India’s R&D investment as percentage of GDP stands at 0.64%.
 Less Contribution by Private Sector: In India, the private sector industry contributes only 36.4% of Gross Expenditure on Research and Development (GERD) during 2020–21. In India, GERD is primarily driven by the government sector (central government (43.7%), State government, Higher Education Institutions (HEIs) and the public sector industry. In major economies such as China, Japan, South Korea, and the U.S.A., 
it is estimated that more than 70% of R&D funding is from private industries.
 Lack of utilization of allocated funds: For example, In 2022-2023, the Department of Biotechnology (DBT), used only 72% of its estimated budget allocation on Centrally Sponsored Schemes (CSSs)/Projects.
 Brain Drain: Talented researchers often migrate to countries with better research infrastructure and funding opportunities.
 Inadequate Education and Training: The education system may not be fully equipping students with the necessary skills and knowledge to thrive in R&D.
 IPR violation: Poor IPR compliance discourages foreign investment flow into the field of R&D in India.

Government of India’s initiatives:
 Anusandhan National Research Foundation (ANRF) Act: The Act aims to bridge India’s persistent R&D investment gap while nurturing a robust research culture within HEIs.
 National Deep Tech Startup Policy (NDTSP): NDTSP aims to support and nurture the unique requirements of Deep Tech startups in India, thereby enhancing the private sector’s role in India’s R&D ecosystem.
 Atal Innovation Mission: It aims to promote innovation and entrepreneurship across the length and breadth of the country. 
 Research Park: Research parks at IIT Delhi, IIT Guwahati, IIT Kharagpur, IIT Kanpur, IIT Chennai, have been established which provide an interface between entrepreneurship and Industry to establish their R&D units in collaboration with students & faculty  members of the IITs.

What is the need of the hour?
 Encourage and attract private sector to collaborate in R&D through easing of FDI norms, tax rebates etc. 
 Promote Government-Industry-Academia partnership to support R&D ecosystem in India. 
 Strong IPR protection 
 Most important – Increase R&D expenditure as a percentage of GDP. We must spend around 3% of GDP every year until 2047.