Status of R and D Expenditure in India

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Context: India celebrates National Science Day on February 28 every year. The 2024 theme is “Indigenous Technologies for Viksit Bharat.”

About National Science Day

National Science Day commemorates the announcement of the discovery of the “Raman Effect” by Sir Chandrasekhara Venkata Raman on February 28, 1928.
C V Raman was honoured with the Nobel Prize in Physics in 1930 for this discovery, becoming the first Indian to win a Nobel Prize in the sciences.
The “Raman Effect” is observed when light passes through a transparent material and its deflection results in a change in wavelength.
The Indian government officially recognized February 28 as National Science Day in 1986, following a proposal by the National Council for Science and Technology Communication.

Recognition of Science in Daily Life: The day emphasises the essential role that science plays in our everyday lives.
Showcasing Scientific Endeavours: It is a platform to display the initiatives, efforts, and accomplishments of scientists for the betterment of humanity.
Reflecting on Progress: Offers a moment to contemplate advancements in science and technology and to pinpoint areas needing further development.

Decline in R&D Expenditure: India’s R&D spending has decreased to 0.64% of its GDP, down from 0.8% in 2008-2009 and 0.7% in 2017-2018.
Government Concerns: Despite calls from within its ranks to double R&D spending, the Indian government has not yet achieved this goal.
Comparison with Developed Countries: Most developed nations allocate between 2% and 4% of their GDP to R&D, with OECD member countries averaging 2.7%.

National Targets: The 2013 Science, Technology, and Innovation Policy and the 2017-2018 Economic Survey have both emphasised the goal of raising Gross Expenditure on R&D (GERD) to 2% of GDP.
Expert Recommendations: Specialists advocate for India to allocate at least 1%, ideally 3%, of its GDP to R&D annually until 2047 to significantly impact development.

Reliance on Public Funding: The majority of India’s R&D funding comes from public sources, indicating a nascent private investment landscape.
Private Sector Contribution: In 2020-2021, the private sector accounted for 36.4% of GERD, with the government contributing 43.7%.
- In developed countries, around 70% of R&D funding typically comes from private entities.
Budget Underutilization: The Indian Ministry of Science and Technology often does not fully utilise its allocated R&D budget.
Departmental Spending: The DBT utilised 72% of its budget, DST used 61%, and DSIR spent 69% of their respective allocations for centrally sponsored schemes in 2022-2023.

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Encouraging Private Sector Involvement: The Indian government aims to increase private sector contributions to R&D spending.
Strategic Financial Planning: Addressing the under-spending and under-utilisation of R&D funds is crucial.
Political Will: Enhanced political prioritisation of R&D is necessary for India’s growth, requiring action from both the Science Ministries and the Ministry of Finance.
Incentivizing Private Investment: Providing tax rebates, easing FDI norms, and creating clear regulatory pathways can boost private investment in R&D.
Bureaucratic Efficiency: There’s a need for improved bureaucratic processes to expedite grant approvals and disbursements.
Monitoring and Evaluation: Strengthening the capacity for evaluating science projects and monitoring fund utilisation is essential.