Boosting R&D

The Modi government’s Rs 1 lakh crore fund proposed to boost private sector research and development (R&D) is a bold step towards addressing the country’s chronic underinvestment in innovation. Structured as low-interest, long-term loans, this initiative signals a crucial shift in the country’s approach to scientific advancement — one that places the private sector at the forefront of the nation’s research ecosystem. India has long lagged behind global leaders in R&D investment, with expenditure stuck at a dismal 0.65 per cent of the GDP. In contrast, the US and China allocate over 2 per cent of the GDP, with their private sectors contributing a staggering 75 per cent of the total R&D spending. In India, however, private sector investment has hovered around 30-36 per cent, reflecting a deep-seated reluctance among industries to prioritise fundamental research over short-term profits. The new scheme seeks to reverse this trend by making funding accessible to companies with commercially viable research proposals, a model akin to a production-linked incentive scheme for R&D.

The newly established Anusandhan National Research Foundation is expected to play a pivotal role in administering these funds. Unlike traditional grant-based schemes, this initiative emphasises applied research with clear commercial potential. This focus on tangible outcomes may ensure that the investment translates into new products, patents and economic growth. However, its success hinges on robust implementation, transparent selection criteria and the ability to attract industry participation beyond a few dominant sectors like pharmaceuticals and defence.

While this move is promising, the government must also strengthen academia-industry collaboration, streamline bureaucratic hurdles and create incentives for long-term innovation rather than short-term gains. The growing number of patents filed by Indians underscores potential for innovation, giving power to the government’s ambitious plan.