Source: The post India increases funding for research and development has been created, based on the article “A gift horse’s teeth: Higher allocations are not enough to boost scientific research” published in “The Hindu” on 10th February 2025.
UPSC Syllabus Topic: GS Paper3- Government Budgeting And Science and Technology
Context: The article discusses India’s 2025-26 budget, which increases funding for research and development. It highlights a ₹20,000 crore investment in small modular reactors and support for private sector R&D. However, concerns remain about infrastructure, private participation, and effective utilization of funds.
For detailed information on India’s R&D Funding and Private Sector Role read this article here
What Is the New Funding Initiative?
- The 2025-26 budget includes ₹20,000 crore for developing small modular reactors, with a target of five reactors by 2033.
- A Research, Development, and Innovation fund is introduced within the Department of Science and Technology (DST).
- This increases DST’s total budgetary allocation to ₹28,000 crore, which is over three times last year’s allocation and seven times the actual expenditure in 2023-24.
How Will This Impact the Private Sector?
- The budget aims to boost private sector involvement in R&D, a field largely dominated by government spending.
- Currently, private sector R&D contribution is only 36%, while total R&D spending in India was 0.64% of GDP in 2020, the lowest since 1995.
- In the last five years, business enterprises accounted for around 40% of government R&D expenditure.
- Public sector R&D units allocated only 0.30% of their sales turnover to research, while the private sector allocated 1.46% in 2020-21 (DST estimates).
What Are the Challenges Mentioned?
- Despite the increased funding, India lacks key infrastructure needed for research growth.
- The country still does not have essential elements like chipsets, semiconductor fabs, and a strong innovation ecosystem.
- Sectors such as fuel, metallurgy, pharmaceuticals, textiles, IT, and biotechnology have technological strengths, but returns from core R&D and intellectual property generation are still low.
What Are the Expected Outcomes?
- The government needs to clearly define how private entities can access funds and outline tangible public benefits.
- Increased funding alone will not ensure success unless structural issues are resolved.
- To make India a global research leader, focus must be on:
- Strengthening foundational infrastructure
- Incentivizing private innovation
- Ensuring long-term industry engagement
Question for practice:
Examine how the 2025-26 budget’s increased funding for R&D addresses private sector participation and infrastructure challenges in India.
