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Source: The post India’s Research and Development spending has been created, based on the article “R&D spend — golden intervention or smoke and mirrors” published in “The Hindu” on 9th February 2024.
UPSC Syllabus Topic: GS paper3- Science and technology-indigenization of technology and developing new technology. Indian economy- Government budgeting.
News: The article discusses India’s plan to set up a ₹1 lakh crore fund for long-term (fifty year), interest-free loans to boost private sector research and innovation, especially in new and important sectors (sunrise domains).
What is the current status of India’s Research and Development spending?
India’s overall research and development (R&D) spending in 2020-21 was ₹1.27 lakh crore.
The private sector’s contribution was 36.4% of the National Gross Expenditure on R&D(GERD). In comparison, the central government contributed 43.7%, state governments 6.7%, higher education 8.8%, and public sector industry 4.4%.
Despite absolute increases in R&D spending (from ₹1.1 lakh crore in 2009-10 to ₹1.27 lakh crore in 2020-21), as a percentage of GDP, it declined from 0.82% to around 0.64%.
In the more technologically advanced countries, GERD accounts for at least 1% of GDP. Even Brazil (1.16%) and South Africa (0.83%) have a higher GERD-to-GDP ratio.
What models of Research and Development have other countries followed?
United States: Adopted Vannevar Bush’s model focusing on fundamental research to drive technological growth. This approach has been a cornerstone of the U.S.’s post-war innovation strategy.
Japan and South Korea: Followed a “techno-nationalist” path since the late 20th century. This model emphasizes building interconnectedness among universities, research institutes, companies, and governments. It’s aimed at fostering a collaborative environment for technological advancement.
Germany, South Korea, and the United States: Notably high private sector contributions to R&D, with percentages of national GERDs being 67%, 79%, and 75%, respectively, illustrating a strong private-sector-led R&D model.
Why is increasing public sector Research and Development important?
Improving Research Quality: Increasing public sector R&D, especially at the state level, is crucial for enhancing the quality of research facilities in state universities. This helps researchers focus on locally relevant problems.
Bridging Lab to Market: Higher public sector investment in R&D can help overcome the bottleneck of transitioning research from the lab bench to practical, market-ready applications, fostering innovation.
Stewarding Long-term, Risk-laden Innovation: Public sector involvement is important for innovations that take decades to develop and involve significant risks, which the state is better equipped to manage than private entities.
What is the challenge with India’s new R&D fund?
Effective Allocation: The challenge lies in how the ₹1 lakh crore will be distributed among various sectors, ensuring effective and strategic use.
Meeting Diverse Demands: There is a need to address the demands from multiple domains like telecommunications, healthcare, finance, transport, and space flight, all vying for a share of the fund.
Focus on ‘Sunrise Sectors’: The finance minister emphasized supporting ‘sunrise sectors’, but even within these, there are numerous fields, each resource-intensive and requiring significant investment.
Sustainability Concerns: A major challenge is ensuring that the funding supports innovation that is not only technologically advanced but also environmentally sustainable.
Way forward
India must strategically prioritize the allocation of the ₹1 lakh crore R&D fund to essential ‘sunrise sectors’. Establishing robust policy frameworks is crucial for equitable and sustainable innovation. Additionally, enhancing public sector R&D, particularly at state levels, is vital for balanced and impactful technological advancement.
Question for practice:
Discuss the challenges and importance of allocating India’s ₹1 lakh crore R&D fund strategically, considering diverse sector demands and sustainability concerns.
