SCIENCE AND SUSTAINABLE FUNDING

2. India's Research and Development (R&D) Expenditure

• Funding for fundamental research in India is among the world's lowest, despite the country's high science and technology ambitions.
• India's R&D expenditure has declined from 0.8% of GDP in 2008-2009 to 0.64% currently. This decrease is concerning, especially as government agencies have called for doubling this spending.
• The 2013 Science, Technology, and Innovation Policy aimed to increase Gross Expenditure on R&D (GERD) to 2% of GDP, a goal reiterated in the 2017-2018 Economic Survey.
• However, the reasons for the reduction in R&D spending, despite the government's acknowledgement of the need to increase it, are not clear. This may be due to a lack of coordination between government agencies and the need for stronger political will to prioritize R&D expenses.
• Most developed countries spend between 2% and 4% of their respective GDPs on R&D. In 2021, OECD member countries averaged 2.7% of their GDP on R&D.
• The U.S. and the U.K. have consistently spent more than 2% of their GDPs on R&D for the past decade.
• Many experts have called for India to spend at least 1%, but ideally, 3%, of its GDP annually on R&D until 2047 for science to have a meaningful impact on development.

3. Enhancing Research and Development (R&D) Spending in India

• Science and technology require consistent, substantial investment to yield meaningful results.
• For India to achieve its goal of becoming a developed nation, it must invest more in R&D than developed countries do to maintain their status. This underscores the importance of spending at least 3% of GDP on R&D annually until 2047.
• India's current R&D spending is insufficient, and its reliance on public funds indicates an immature financing system and a weak domestic market.
• In 2020-2021, the private sector contributed only 36.4% of the Gross Expenditure on R&D (GERD), while the Union government's share was 43.7%.
• State governments (6.7%), higher education (8.8%), and the public sector industry (4.4%) were the other major contributors.
• In economically developed countries, the private sector typically accounts for 70% of R&D investment.
• However, the private sector's reluctance to invest in India may be attributed to several factors, including the country's poor capacity to evaluate R&D, ambiguous regulatory roadmaps that can deter investors, lack of clear exit options for investors in sectors like biotechnology, and concerns about intellectual property rights theft.
• The Anusandhan National Research Foundation was established to address some of these financial issues, but its implementation has been delayed.
• The government's annual budget of ₹2,000 crore for its implementation was reduced to ₹258 crores this year.
• Strategies for raising the remaining ₹7,200 crore from the private sector have not been clarified.
• Therefore, there is a pressing need to determine the overall quantum of R&D funding and its primary sources, given India's ambition to become a developed country by 2047.

4. Optimizing R&D Budget Utilization in India

• While the need for India to double its R&D investment has been emphasized, the effectiveness of the allocated funds is often overlooked.
• The Union Ministry of Science and Technology has consistently under-utilized its budget. Therefore, while calls for increased funding are valid, improved budget utilization is also essential to drive scientific outcomes.
• In 2022-2023, the Department of Biotechnology (DBT) utilized 72% of its estimated budget allocation on centrally sponsored schemes/projects, while the Department of Science and Technology (DST) utilized only 61%.
• The Department of Scientific and Industrial Research (DSIR), which receives the lowest allocation for centrally sponsored schemes, spent 69% of its allocation.
• This underutilization is not an isolated incident but has been consistently observed over several years.
• This trend is not unique to the Science Ministry; India generally under-spends R&D, and there would likely be a significant impact if the allocated funds were spent optimally.
• The reasons for under-utilization, like under-allocation, are unclear and may indicate cumbersome bureaucratic processes for approving disbursements, a lack of capacity to evaluate projects or clear utilization certificates, a lack of prioritization for science funding by the Ministry of Finance, or inadequate planning or implementation strategies for the requested funds by the Ministry of Science and Technology.
• The lack of capacity also leads to delays in grant and salary disbursements. Most of these issues can be addressed by enhancing capacity within different governmental agencies.

5. Sustainable Funding for Research and Development

• In the latest budget, Finance Minister Nirmala Sitharaman indicated a desire for increased private sector contributions to R&D expenditure.
• Addressing the under-spending and under-utilization of funds earmarked for R&D is a crucial first step. This requires political prioritization of R&D spending and recognition of its importance in India's growth journey.
• This prioritization must occur not only within concerned ministries but also at the Ministry of Finance, which disburses the funds. Incentives for private investment, such as the relaxation of foreign direct investments, tax rebates, and clear regulatory roadmaps for products, can help build investor confidence.
• Additionally, India needs bureaucratic capacity to evaluate science projects and monitor utilization after allocations.
• Building this capacity is essential for India to become a scientific power by 2047.
• As we celebrate science for sustainable development this National Science Day, let's remember that sustainable funding for science is crucial.