India’s R&D Funding Status- Explained Pointwise

India’s R&D Funding has received a major boost with the announcement of a corpus of ₹1 lakh crore in the interim Budget for 2024-25, to bolster the research and innovation ecosystem within the country.

The decision to rebrand the slogan, ‘Jai Jawan Jai Kisan’ (by Lal Bahadur Shastri) to ‘Jai Jawan, Jai Kisan, Jai Vigyan’ (A.B. Vajpayee) to now ‘Jai Jawan, Jai Kisan, Jai Vigyan, Jai Anusandhan’ (by the Prime Minister) is intended to reinforce the foundation of research and innovation for development. However, there is need to scale up India’s R&D Funding to make India a developed economy by 2047.

India’s R&D sector has demonstrated both positive and negative status in India.

What is the Positive status of India’s R&D Funding?

1. Significant Growth in R&D expenditure- India’s R&D is witnessing significant growth, with a notable increase in Gross Expenditure on Research and Development (GERD) from ₹6,01,968 million in 2010-11 to ₹12,73,810 million in 2020-21.

2. Powerhouse in producing academic talent- India generates an impressive 40,813 PhDs and is in third place after the United States and China. This achievement reflects India’s commitment to fostering intellectual capital and contributing significantly to global research endeavours.

3. 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.

4. High number of Patent Grants- India has also demonstrated commendable performance in patent grants compared to the R&D Funding. India has secured the sixth position globally with 30,490 patents granted in 2022.

5. Emphasis on Autonomous R&D Laboratories and Institutions- These autonomous laboratories serve a pivotal role in driving research and technology development with strategic implications. According to the R&D statistics (2022-23) of the Department of Science and Technology, India’s total investment in R&D reached $17.2 billion in 2020-21. Within this sum, 54% ($9.4 billion) is allocated to the government sector and predominantly utilised by four key scientific agencies — the DRDO (30.7%), the DoS (18.4%), ICAR (12.4%), and DEA (11.4%). Rest 46% has been used by the autonomous R&D laboratories and Institutions.

What is the Negative status of India’s R&D Funding?

1. Low R&D investment as percentage of GDP- India’s R&D investment as percentage of GDP stands at 0.64%. India falls behind major developed and emerging economies in R&D investment as % of GDP, such as China (2.4%), Germany (3.1%), South Korea (4.8%) and the United States (3.5%).

2. 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 governments (6.7%), Higher Education Institutions (HEIs) (8.8%), and the public sector industry (4.4%)). In leading innovative economies such as China, Japan, South Korea, and the U.S., a significant portion (>70%) of R&D funding is from private industries.

3. Under-Utilisation of Allocated Funds- In 2022-2023, the Department of Biotechnology (DBT), used only 72% of its estimated budget allocation on Centrally Sponsored Schemes (CSSs)/Projects while the DST used only 61% of its allocated budget. This points to massive under-utilisation of allocated funds.

4. Lack of Adequate Funding Support from state governments- As per the RBI’s report, State Finances: A Study of Budgets of 2023-24, the R&D expenditure of state governments was 0.09% of the GSDP on average.

What are the Other Challenges Facing R&D Sector in India?

1. Lack of Skilled R&D Personnel- The best talent of India in R&D migrates to foreign countries, resulting in brain drain.

2. IPR violation– Poor IPR compliance discourages foreign investment flow into the field of R&D in India.

3. Outdated Curriculum and Pedagogy- The curriculum in many eminent universities is still focused on rote learning and oriented to getting jobs. Many eminent universities are unable to duly utilise the research grant provided to them.

4. Lack of focus on application- Indian university system has been focussing on basic research rather than application research. That has limited its value to industry, and hence diminished the industry support.

What are the Government Initiatives to boost R&D in India?

What Should be the way Forward?

1. Encouraging Private Sector Collaboration in R&D- Incentives for private investment, including relaxation of foreign direct investments (FDIs), tax rebates, and clear regulatory roadmaps for products will encourage private sector collaboration in R&D.

2. Increasing R&D Expenditure as Percentage of GDP- India must spend 3% of its GDP every year until 2047 on R&D for science to have a meaningful impact on development.

3. Ensuring the Increased Role for HEIs in India- Government should promote Government-Industry-Academia partnership to support the R&D Ecosystem in India. HEIs would play an integral role in the partnership.

4. Strong IPR protection- National IPR policy of 2016 should be duly adhered in order to gain investor confidence and attract more investment in R&D.

5. Mandating Proper Utilization of Allocated Funds- The allocated funds and budgets to the research organisations must be properly utilized.