Editorial: Big push to India’s R&D

India’s Rs 1 lakh crore R&D scheme is a timely intervention, addressing low investment in research and development — particularly poor participation of the private sector

Brain drain continues to be a big challenge for India. The absence of an ecosystem that nurtures innovation and research is the main reason why the bright minds leave the country in search of greener pastures. A key parameter that reflects a country’s commitment to research and innovation is its Gross Expenditure on R&D (GERD). India’s GERD has been abysmally low at 0.64 per cent. Globally, India fares poorly in R&D expenditure. The US leads the world with nearly USD 784 billion in 2023, followed by China at USD 723 billion. Japan is a distant third (USD 184 billion), followed by Germany (USD 132 billion), South Korea (USD 121 billion), the United Kingdom (USD 88 billion) and India (USD 71 billion), according to data compiled by the World Intellectual Property Organisation. Moreover, research spending in India is largely driven by the government sector, with the private sector contributing only 36.4 per cent to the total R&D expenditure. Against this backdrop, the central government’s recent approval for a new Research, Development and Innovation (RDI) scheme with a corpus of Rs 1 lakh crore to boost private sector investment in innovation and commercial R&D is a welcome development. This will go a long way in promoting a culture of research and innovation, particularly in emerging technology areas. The fund is meant for long-term financing or refinancing at low interest rates. It will be in the form of growth and risk capital for private companies willing to scale up R&D and technology development in strategic areas to serve the national objective of self-reliance.

Projects that show a high ‘Technology Readiness Level’ will be funded, besides those involving the acquisition of technologies of critical or strategic importance. Unveiling a new scheme is timely because of the poor share of the private sector in R&D for a long time, and overall low investment in R&D. This is not the first time that an initiative has been announced to de-risk private sector investment in high-technology areas. In the past, the Software Technology Park of India (STPI) provided much-needed help to entrepreneurial software firms in the form of shared satellite data-link facilities, affordable office space and massive tax breaks. Many of these entrepreneurial firms are today’s multi-billion-dollar behemoths and have diversified into outsourced R&D and product development. The software sector’s contribution to India’s GDP is about 8 per cent. Similarly, the first two biotechnology and vaccine companies — Shanta Biotechnics and Bharat Biotech — were generously funded by the Technology Development Board (TDB) established under the Department of Science and Technology (DST). They contributed to Hyderabad emerging as India’s vaccine capital. Later, the Department of Scientific and Industrial Research launched the New Millennium Indian Technology Leadership Initiative, and the Department of Biotechnology came up with the Biotechnology Industry Research Assistance Council. There is a need to consolidate the gains made so far, focusing on cutting down bureaucratic delays.

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