R&D Budget Implementation Needs Attention

Syllabus: GS3/Science and Technology

Context

• India’s research and development (R&D) sector is pivotal for driving innovation, economic growth, and global competitiveness.
  • However, despite increasing budget allocations, the effective implementation of R&D budgets remains a significant challenge.

India & Research & Development (R&D) Sector

• As one of the fastest-growing economies, India has been making significant investments in R&D, focusing on science, technology, healthcare, space, and digital transformation.
• High-impact areas:
  • Pharmaceuticals & Biotechnology: India is known as the ‘Pharmacy of the World’ with major breakthroughs in vaccine development, generic medicines, and biotech innovations.
  • Space Research: ISRO has been a global leader, successfully executing missions like Chandrayaan, Mangalyaan, and Gaganyaan.
  • Information Technology & AI: India is a global hub for IT services, with increasing investments in AI, machine learning, and cybersecurity.
  • Renewable Energy & Sustainability: Research in solar and wind energy is driving India’s push toward sustainability and carbon neutrality.

Current State of R&D Funding

• Low Investment in R&D: India’s Gross Expenditure on Research and Development (GERD) as a percentage of GDP has remained relatively low, hovering around 0.6-0.7% of GDP significantly lower than the global average of 2.6%.
  • In comparison, countries like Israel and South Korea allocate 5.6% and 4.8% of their GDP, respectively, to R&D.
• Sectoral Distribution in India:
  • Defence Research and Development Organisation (DRDO): 30.7%
  • Department of Space: 18.4%
  • Indian Council of Agricultural Research: 12.4%
  • Department of Atomic Energy (DAE): 11.4%
  • Council of Scientific and Industrial Research (CSIR): 8.2% 
  • Ministry of Environment,Forest and Climate Change (MoEFCC): 0.8%
  • Ministry of New and Renewable Energy (MNRE): 0.1%
    • However, sectors like renewable energy and environmental research receive minimal allocations.

Private Sector & Startups

• Companies like Tata Consultancy Services (TCS), Infosys, Biocon, Sun Pharma, and Reliance Industries are investing heavily in R&D.
• India has a thriving startup ecosystem, with AI, fintech, health tech, and edtech companies focusing on innovation.

Key Challenges

• Underutilization of Funds: Departments such as Biotechnology and Science & Technology utilized only 72% and 61% of their allocated budgets, respectively, in FY23.
  • It reflects inefficiencies in fund disbursement and project execution.
• Irregular Fund Release: Delayed and last-minute release of funds leaves research institutions with insufficient time to utilize budgets effectively, leading to financial and operational pressures.
• Administrative Burdens: Researchers often face excessive administrative formalities, diverting their focus from intellectual pursuits to compliance with financial rules.
• Brain Drain: Many talented researchers move abroad due to limited opportunities and funding.
• Industry-Academia Gap: Collaboration between universities and private industries is still weak.
• Patent & Innovation Bottlenecks: While India files many patents, commercialization and innovation lag behind.

Key Government Initiatives Boosting R&D in India

• National Research Foundation (NRF): Aims to boost research funding and infrastructure in higher education institutions.
• Atal Innovation Mission (AIM): Encourages startups, entrepreneurship, and innovation via Atal Tinkering Labs.
• Impacting Research Innovation and Technology (IMPRINT): Supports research in engineering and technology domains.
• Science, Technology, and Innovation Policy (STIP 2020): Focuses on self-reliance and indigenous research.
• Science and Engineering Research Board (SERB): Provides competitive funding for R&D across scientific disciplines.
• Make in India & Startup India: Supports innovation-driven manufacturing and entrepreneurship.
• Technology Development Board (TDB): Funds commercialization of indigenous technology.
• Biotechnology Industry Research Assistance Council (BIRAC): Promotes biotech research and startups.
• Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME India): Supports R&D in electric mobility.
• PLI (Production-Linked Incentive) Scheme: Encourages R&D in manufacturing sectors like electronics and pharmaceuticals.

Recommendations for Improvement

• Streamlined Fund Disbursement: Ensuring timely and phased release of funds throughout the fiscal year can enhance budget utilization and reduce last-minute pressures.
• Capacity Building: Training administrative staff and researchers in financial management can improve compliance and efficiency.
• Focus on Emerging Sectors: Allocating more resources to underfunded areas like renewable energy and environmental research can address critical challenges and foster innovation.
• Monitoring and Accountability: Establishing robust mechanisms for tracking fund utilization and project outcomes can ensure transparency and accountability.

Conclusion

• Effective implementation of R&D budgets is crucial for India to achieve its scientific and technological aspirations. By addressing systemic inefficiencies and prioritizing strategic investments, the country can unlock the full potential of its research ecosystem
• Strengthening R&D capabilities will not only enhance India’s global standing but also drive sustainable and inclusive development.

Source: BL