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EDITORIAL ANALYSIS : India’s R&D funding, breaking down the numbers


Source: The Hindu


  • Prelims: GDP, GERD, Department of Science and Technology (DST), new scientific methods, CSIR etc
  • Mains GS Paper III: Important aspects of technology, Achievements of Indians in science & technology; indigenization of technology and developing new technology etc



  • Interim Budget(2024-25) announced a corpus of ₹1 lakh crore to bolster the research and innovation ecosystem within the country.
  • Rebranding of 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)
  • India’s research and development (R&D) expenditure-GDP ratio of 7(zero point seven)% is very low when compared to major economies and is much below the world average of 1.8(one point eight)%.




Research and Development:

  • R&D of new products and solutions to diseases are key drivers of economic performance and social well-being.
  • It is important to inculcate scientific temper among masses in order to fight superstitions and  distorted truth.
  • Innovation and technological improvement is essential to combat and adapt to climate change and promote sustainable development.
  • It is imperative for combating national security threats like cyber warfare.
  • The National Science and Technology Management Information System (NSTMIS) of the DST is the agency that compiles GERD statistics in India.


Reasons for low expenditure on R&D:

  • The main reason is the low investment in R&D by the corporate sector.
    • Corporate sector accounts for about two-thirds of gross domestic expenditure on R&D (GERD) in leading economies,
    • Share in India37%.


Significance of research and innovation:

  • Fuelling economic growth
  • Technological advancement
  • Global competitiveness.


India’s R&D:

  • 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.
  • Investment as a percentage of GDP standing at 64%
  • India falls behind major developed and emerging economies such as China (2.4%), Germany (3.1%), South Korea (4.8%) and the United States (3.5%).

India’s Research output, innovation:

●      India has emerged as a powerhouse in producing academic talent.

●      Annually, India generates an impressive 40,813 PhDs and is in third place after the United States and China.

●      India’s research output remains substantial, ranking third globally, with over 3,00,000 publications in 2022

○      It highlights the nation’s robust research ecosystem and its commitment to advancing knowledge across diverse fields.

●      Patent grants: India secured the sixth position globally with 30,490 patents granted in 2022.

○      It is lower compared to the U.S. and China.

Gross Expenditure on Research and Development (GERD):

  • It is primarily driven by the government sector, including the central government (43.7%), State governments (6.7%), Higher Education Institutions (HEIs) (8.8%), and the public sector industry (4.4%)
    • private sector industry contributing only 4% during 2020–21.
  • Collaboration between the government, business enterprises and HEIs is essential to maximize the positive impact of science, technology, and innovation on economic growth and technological advancement.

●      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.

○      54% ($9.4 billion) is allocated to the government sector

○      It is predominantly utilized by four key scientific agencies

■      Defence Research and Development Organisation (30.7%)

■      Department of Space (18.4%)

■      Indian Council of Agricultural Research (12.4%)

■      Department of Atomic Energy (11.4%).

●      A significant portion of R&D funding originates from the government, with considerable allocation directed towards autonomous R&D laboratories operated by the government.

○      Laboratories serve a pivotal role in driving research and technology development with strategic implications.

●      The symbiotic relationship between government funding, R&D execution, and strategic focus underscores the integral role of the government in steering and fostering key scientific advancements.

●      Contribution of private industries lags behind that of many other economies.

○      Indian businesses represent 37% of the country’s GERD, in contrast to the global trend, where business enterprises typically contribute over 65% of R&D.

○      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

○      It is driven by market forces and profit motives, and the actual R&D activities are conducted in the HEIs.

●      Higher Education Institutions (HEIs): HEIs play a comparatively minor role in the overall R&D investment, contributing 8.8%.


What steps need to be taken?

  • Assess the current research and development (R&D) funding landscape in India and its resulting output:
    • Examining India’s comparatively lower R&D expenditure as a percentage of GDP
    • Output in terms of patent grants, PhDs awarded, and publication outputs.
    • Analyzing the quality of output is imperative in understanding the true implications of these initiatives.
  • A multi-pronged approach involving diverse stakeholders is necessary to address the challenges and unlock the potential of R&D for India’s economic growth and competitiveness.

●      Learning from the R&D ecosystem in other developed countries while maintaining India’s strengths in streamlined decision-making and strategic alignment could be a powerful force to optimize its R&D landscape.

●      India must implement policies that incentivise private companies to invest in R&D.

Impact of initiatives

●      India’s technological and manufacturing aspirations hinge on a transformative shift in its R&D landscape.

●      Closing the existing gap demands a dual strategy: It encourages private sector involvement and fortifies academia’s research infrastructure.

●      Initiatives such as the National Deep Tech Startup Policy (NDTSP) signal a strong commitment to technological progress and innovation.

○      This policy holds the potential to incentivise private sector engagement in India’s R&D ecosystem.

●      Despite the substantial time and technical uncertainties involved in Deep Tech’s creation, allocating resources to safeguard intellectual property and tackle technical obstacles can unlock untapped markets.


Way Forward

■      India’s R&D ecosystem has its advantages in terms of efficiency, but could benefit more from strong private enterprises involvement and stronger industry-academia collaboration, facilitating knowledge transfer and fostering innovation.

■     The recent enactment of the Anusandhan National Research Foundation (ANRF) Act, underscores the government’s dedication to catalyzing research and innovation as the cornerstone of development.

  • This legislative move will bolster scientific research
  • The Act aims to bridge India’s persistent R&D investment gap while nurturing a robust research culture within HEIs.
  • This initiative must surmount challenges such as ensuring equitable fund distribution, fostering interdisciplinary collaborations, and upholding global standards.
  • These efforts are poised to elevate R&D spending in India, providing strategic guidance for research, innovation, and entrepreneurship while encouraging greater private sector involvement.
  • The interim Budget, combined with the NDTSP and ANRF Act, sends positive signals regarding India’s commitment to incentivising private sector-led research and innovation, particularly in burgeoning industries.
  • Transforming India’s R&D statistics truly reflect the R&D ecosystem calls for short-term and medium-term measures.
    • In the short term, the NSTMIS should use the patents granted data, both in India and the U.S., in addition to its current method to identify R&D performing enterprises.



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Editorial Analysis – 14 Mar 2024