<p class="bodytext">The Central government’s proposal to launch a Rs-1 lakh crore fund to boost Research and Development (R&D) in the private sector may turn out to be a major initiative to improve performance in a vital area. Under the scheme, low-interest, long-term loans will be offered to private sector companies to develop their R&D infrastructure and efforts, and it is expected to become operational in the next few months. It is based on wide-ranging consultations and strategies, and details on the implementation are being finalised. Finance Minister Nirmala Sitharaman had made an announcement about the scheme during the interim budget for 2024-25 and it is being given a concrete shape now. The importance of the scheme cannot be overstated as India lags behind in R&D in multiple sectors.</p>.<p class="bodytext">The initiative marks a policy shift as it focuses on the private sector. Investment in research is low both in the public and private sectors. India’s investment in R&D is a poor 0.65 per cent of the GDP. In the US and China, it is over 2 per cent of the GDP and the private sector accounts for about 75 per cent of the total R&D spending in those countries. Private sector investment has not gone beyond 35 per cent in India. This shows a lack of enthusiasm among private companies to invest in research. This is strange because innovation through R&D has proven to be the best strategy for companies to grow and become competitive. There is no major brand or product from India which has made a mark in the world. The new scheme is intended to encourage the private sector to support research by funding commercially viable projects, on the lines of a production-linked incentive scheme.</p>.Leaders in their own right.<p class="bodytext">The Anusandhan National Research Foundation is expected to play a key role in administering the funds. The focus will be on applied research which will yield tangible outcomes in terms of new products, patents etc. India’s economy cannot develop without positive R&D outcomes. While the accent on applied research is necessary, pure research is very important because it constitutes the R&D base in every field. In many advanced countries, universities are in the forefront of research activities but in India, even technical institutions imparting higher education have made no impact with their R&D efforts. The standards of education should also improve, starting at the primary school level – there is a need to foster in large numbers youngsters equipped to do research. It is also necessary to develop among students curiosity and a spirit of inquiry which are essential requirements for a researcher.</p>
<p class="bodytext">The Central government’s proposal to launch a Rs-1 lakh crore fund to boost Research and Development (R&D) in the private sector may turn out to be a major initiative to improve performance in a vital area. Under the scheme, low-interest, long-term loans will be offered to private sector companies to develop their R&D infrastructure and efforts, and it is expected to become operational in the next few months. It is based on wide-ranging consultations and strategies, and details on the implementation are being finalised. Finance Minister Nirmala Sitharaman had made an announcement about the scheme during the interim budget for 2024-25 and it is being given a concrete shape now. The importance of the scheme cannot be overstated as India lags behind in R&D in multiple sectors.</p>.<p class="bodytext">The initiative marks a policy shift as it focuses on the private sector. Investment in research is low both in the public and private sectors. India’s investment in R&D is a poor 0.65 per cent of the GDP. In the US and China, it is over 2 per cent of the GDP and the private sector accounts for about 75 per cent of the total R&D spending in those countries. Private sector investment has not gone beyond 35 per cent in India. This shows a lack of enthusiasm among private companies to invest in research. This is strange because innovation through R&D has proven to be the best strategy for companies to grow and become competitive. There is no major brand or product from India which has made a mark in the world. The new scheme is intended to encourage the private sector to support research by funding commercially viable projects, on the lines of a production-linked incentive scheme.</p>.Leaders in their own right.<p class="bodytext">The Anusandhan National Research Foundation is expected to play a key role in administering the funds. The focus will be on applied research which will yield tangible outcomes in terms of new products, patents etc. India’s economy cannot develop without positive R&D outcomes. While the accent on applied research is necessary, pure research is very important because it constitutes the R&D base in every field. In many advanced countries, universities are in the forefront of research activities but in India, even technical institutions imparting higher education have made no impact with their R&D efforts. The standards of education should also improve, starting at the primary school level – there is a need to foster in large numbers youngsters equipped to do research. It is also necessary to develop among students curiosity and a spirit of inquiry which are essential requirements for a researcher.</p>
