| Introduction: Contextual Introduction Body: Highlight Challenges in India’s R&D Ecosystem & measures to create a more conducive research ecosystem. Conclusion: Way forward |
The Budget 2025-26 has earmarked significant funds for research and development (R&D), including ₹20,000 crore for small modular reactors and a major boost to the Department of Science and Technology (DST).
Challenges in India’s R&D Ecosystem
- Low Private Sector Participation: India’s R&D landscape is overwhelmingly driven by government funding, with private sector contributions at just 36%. Despite efforts to incentivize industry participation, business enterprises accounted for only 40% of government R&D expenditure in recent years.
- Ineffective Utilization of Funds: The ₹20,000 crore allocation triples last year’s DST budget, but absorption capacity remains a concern. The lack of essential infrastructure, such as semiconductor fabs and chipsets, limits the impact of such funding.
- Weak Intellectual Property (IP) Generation: Despite strengths in IT, pharmaceuticals, and biotechnology, India lags in core R&D returns and patent filings. Public sector R&D units allocated just 0.30% of their sales turnover to research in 2020-21, compared to 1.46% by private entities.
- Inadequate Research Infrastructure and Talent Pool: The success of emerging fields like AI, quantum computing, and semiconductors requires a highly skilled workforce. India lacks a robust research infrastructure to support cutting-edge innovation.
- Ambiguous Implementation Strategy: While the budget promotes R&D funding for startups and sunrise sectors, the exact mechanisms for fund disbursement remain unclear. Without a well-defined road map, private sector engagement could remain limited.
Way Forward
- Strengthening Research Infrastructure: Investments should focus on setting up semiconductor fabs, AI research hubs, and advanced engineering institutions.
- Incentivizing Private Sector R&D: Tax benefits, public-private partnerships, and targeted subsidies can encourage private sector involvement.
- Enhancing Industry-Academia Collaboration: Universities should work closely with industries to drive applied research and commercialization of innovations.
- Streamlining Fund Utilization: A transparent framework for R&D fund allocation and monitoring should be established.
- Skilling the Workforce: Training programs in AI, quantum computing, and semiconductor technology are crucial for long-term sustainability.
Conclusion
Higher allocations in the budget signal intent, but systemic challenges must be addressed for meaningful impact. A clear strategy for infrastructure development, private sector participation, and skill-building is essential for India to emerge as a global research leader.
