No quick fix – on National Research Foundation (NRF)

Source– The post is based on the article “No quick fix” published in “The Hindu” on 21st July 2023.

Syllabus: GS 3 – Science and Technology

Relevance: Issues related to Research & Development

News- The government will table the National Research Foundation (NRF) Bill, 2023 in the current session of the Parliament.

What are some facts about NIRF?

The plan involves the establishment of a fresh, centralised organisation responsible for funding research. It will be allocated with a budget of ₹50,000 crore for the upcoming five years.

It takes inspiration from successful models like the United States’ National Science Foundation, which provides nearly $8 billion in funding for college and university research, and the European Research Council.

What is the logic behind establishment of NIRF?

India’s research expenditure has historically remained at a lower level. It ranges between 0.6% to 0.8% of the GDP, which is considerably below the 1% to 2% invested by countries heavily reliant on science and technology.

A comparison with nations like China, the U.S., and Israel reveals that these countries receive almost 70% of their research funding from the private sector. In contrast, in India, the private sector’s contribution accounted for only about 36% of the total research expenditure.

Therefore, the government believes that the most effective approach to encourage university research in India is to attract more private investment into the research sector.

What are obstacles in the success of NIRF?

The implementation of such a proposal is currently uncertain. One suggestion is to direct the funds allocated by private companies as part of their annual corporate CSR obligations to the National Research Foundation.

Data from the Ministry of Corporate Affairs indicates that in the fiscal year 2022, companies spent ₹14,588 crore on their CSR obligations. Historically, around 70% of these funds were utilised for projects related to education, healthcare, and sanitation.

Additionally, many companies tend to invest these funds in initiatives within their own communities. The government does not have any control over how these funds are utilised. Whether the government can compel companies to channel some of these funds into the NRF, or provide tax benefits to encourage such contributions, remains to be seen

What is the way forward for the success of NIRF?

In numerous countries, the higher involvement of private sector research can be attributed to consistent government support provided to universities and research institutions.

This support has inspired individuals to establish companies and institutions that recognize the significance of investing in research and development.

The issue in India is not the lack of such companies but rather the scarcity of their presence. Entities like the NRF should focus on creating favourable conditions that motivate the growth of private sector organisations inclined towards innovation.