Can Budget revive India’s dull R&D landscape?

Finance Minister Nirmala Sitharaman announced in her interim budget speech in February this year that a ₹1 lakh crore corpus would be established with a 50-year interest-free loan for long-term financing of research and innovation in sunrise domains, including deep defence technology. But the scheme is yet to take shape of a policy or financial allocations. The budget is expected to give clarity on the scheme as India’s research and development (R&D) segment finds less capital from private companies.

In emerging areas such as AI, environment sciences and biotechnology, R&D serves both economic and strategic interests, says the survey. “India is making rapid progress in R&D, with nearly one lakh patents granted in FY24, compared to less than 25,000 patent grants in FY20,” said the Survey.

India’s R&D investment as a percentage of GDP stands at 0.64%, compared to China’s 2.41%, US’s 3.47%, and Israel’s 5.71%. Moreover, the private sector’s contribution to R&D remains low at 36.4% of the country’s gross domestic expenditure on R&D (GERD), compared to China’s 77% and US’s 75%.

According to World Intellectual Property Organization (WIPO), India saw the highest growth of 31.6% in patent filings in 2022, demonstrating its evolving innovation landscape and potential for further growth in intellectual property creation. “India has consistently improved its rank in the Global Innovation Index (GII) from 81st position in 2015 to 40th in 2023,” said the Economic Survey. On the human resource side, total Ph.D. enrolment in India has increased to 81.2% in FY22 (2.13 lakh) from FY15 (1.17 lakh).

The Gross Expenditure on R&D (GERD) in the country has been increasing over the years and has more than doubled from ₹60,196.8 crore in FY11 to ₹ 127,381 crore in FY21, the Survey noted. “As a mark of India’s ascent in high-quality research, the country climbed up to 9th rank in the Nature’s Index 2023, overtaking Australia and Switzerland. India’s share of high-quality research articles (measured in terms of absolute numbers and not percentages) increased by 44% in the past four years. However, India’s share remains significantly lower compared to China and the US,” said the Survey.