The magazine Nature, in its April 2024 issue’s editorial, flags India’s readiness towards becoming a science powerhouse. This is not yet a given, but it can happen, it says. Significantly, the editorial focuses on the yawning funding gap that obtains in S&T funding and suggests some measures that could bridge the same. Its main recommendation is to boost science spending by encouraging businesses to contribute more, as is the case for other leading economies. If policymakers and industrialists can get this right, an opportunity to put rocket boosters under the country’s impressive scientific achievements is there for the taking, the editorial optimistically observes.
There is a caveat too. The neglect of basic research may stymie this progress while a much greater autonomy in a thriving research system may provide impetus to this promising journey.
What the Nature’s editorial points out is something that is both obvious and odious. Obvious because it indeed is so, and odious because everyone knows it, but no one seems to be able to do much about it. The government has its own constraints while private investment is merely looking at immediate gains, which are often not forthcoming. The core community that mans and guides S&T research needs strengthening its competence, innovative acumen, and, of course, integrity.
INDIA’S IMPRESSIVE ACHIEVEMENTS
Despite these challenges, India’s achievements in S&T are nothing short of impressive. The country boasts the third-largest pharmaceutical industry in the world by volume and is a major supplier of affordable medicines, playing a crucial role in the global fight against epidemics including COVID. India’s recent moon landing near the lunar south pole and its extensive remote-sensing satellite network underscore its capabilities in space exploration. Notably, it owns the world’s largest constellation of remote-sensing satellites.
Image Courtesy: ISRO
Furthermore, India ranks third globally in terms of research output, trailing only the US and China. Its academic infrastructure has expanded considerably, with the number of universities increasing from 760 in 2014 to 1,113 in 2021, and the addition of new Indian Institutes of Technology (IITs) and Indian Institutes of Science Education and Research (IISERs).
YET UNDERFUNDED
These gains have been made despite India’s spending on research and development (R&D) remaining at a mere 0.64% of its GDP as of 2020–21, a stark contrast to the 2.7% average among high-income countries in the Organisation for Economic Co-operation and Development (OECD). In 2021, China spent 2.4% on R&D, according to World Bank data.
In absolute terms, India’s science spending, adjusted for purchasing power parity (PPP), increased from the equivalent of US$50.3 billion in 2014-15 to $57.9 billion in 2020-21, according to DST data. PPP is a measure of the buying power of a currency in different countries. What matters more, including for the purposes of international comparisons, however, is the share of R&D as a fraction of GDP. After economic reforms were introduced in 1991, India’s share of R&D spending rose steadily, peaking in 2009-10 at 0.82% of GDP before declining to its present levels, according to DST data.
HISTORICAL TRENDS IN INVESTMENT
Historically, India’s investment in S&T has lagged behind other major economies. As indicated above, in 2020-21, India spent just 0.64% of its GDP on R&D, far below countries like Israel (4.9%), South Korea (4.8%), and the US (3.1%). Most of this funding comes from the government, with significant contributions directed to sectors like defence, space, and atomic energy. However, areas such as AI, renewable energy, and healthcare remain underfunded.
India’s reliance on public funding for research has also meant that the private sector’s contribution to S&T remains limited. Approximately 60% of India’s research spending comes from government sources, compared to the 74% private sector contribution in OECD nations.
GROWTH IN SCIENCE BUDGETS
India’s 2024 budget for S&T, while showing an increase over the previous years, presents a mixed picture. The Ministry of Science and Technology has been allocated ₹16,628 crore, a 31% increase over revised estimates from 2023-24. This includes notable increases for the Department of Science and Technology (64%) and the Department of Biotechnology (42%). However, these percentages are not so impressive when seen against the drastic reduction in revised estimates from the prior year. The inability of S&T institutions to fully utilise their allocated funds further complicates the issue.
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The following aspects of allocation and utilisation of financial resources merit attention:
- Inconsistent Funding and Reductions: Although the Ministry of Science and Technology has seen an increase in its overall budgetary allocation over the years, the actual expenditure often falls short of the allocated budget. For example, in 2023-24, allocations for crucial areas such as the National Research Foundation (NRF) and Research and Development under DST saw drastic reductions from budget estimates to revised estimates. The NRF allocation decreased from ₹2,000 crore to ₹259 crore, and R&D under DST fell from ₹592 crore to ₹200 crore. This pattern of underutilisation and inconsistent funding hampers the long-term planning and execution of research projects. Such cuts often disrupt research continuity, especially in critical and emerging sectors like quantum technology.
- Declining Investment in Research and Development (R&D): India’s expenditure on R&D, measured through Gross Expenditure on Research and Development (GERD), has been steadily declining as a percentage of GDP since 2009-10, which has been consistently lower than the national goal of 2%. This reduction can be attributed to the diversion of funds to more immediate priorities such as healthcare, education, and hunger management, as highlighted by NITI Aayog. The low per capita R&D expenditure indicates an underinvestment in scientific research, which in turn restricts the potential for innovation and technological progress.
- Challenges in Private Sector Participation: The private sector’s contribution to R&D, stagnant at around 0.25% of GDP, is notably low compared to countries like the USA, China, and Germany, where the private sector plays a more substantial role in funding R&D. Although initiatives like the 2020 Science, Technology, and Innovation Policy and the permission for CSR funds to be utilised for research may encourage private investment, the current figures reflect a persistent gap in private sector participation, which is essential for translating R&D findings into commercial successes.
- Talent Migration and Researcher Deficit: India faces a significant talent migration issue, where skilled researchers seek better opportunities abroad due lack of funding and resources domestically. In 2020, India had only 260 researchers per million people, compared to 4,452 in the USA and 1,602 in China. The low gross enrolment ratio (GER) in higher education, standing at 28.4% in 2021-22, further aggravates this problem by limiting the number of individuals entering scientific fields. The National Education Policy (2020) aims to address this by increasing GER to 50% by 2035, but the current shortfall hinders the development of a robust R&D ecosystem.
- Emerging Areas for Investment: Reports and policies have emphasised the need for India to focus on emerging fields such as artificial intelligence, blockchain, and cybersecurity. However, the high dependence on imported technology, along with underfunded R&D, impedes progress in these cutting-edge sectors. Without substantial investments and strategic planning, India risks falling behind in these areas of global importance. This highlights the urgency of improving R&D spending and the allocation of resources to ensure technological independence.
In summary, while India’s science and technology sector has significant potential, it faces challenges such as underutilisation of allocated resources, declining R&D investment, limited private sector engagement, talent migration, and insufficient focus on emerging fields. Addressing these issues requires a concerted effort in boosting both public and private investments, aligning policy goals with execution, and fostering an environment that retains talent and encourages innovation.
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A CASE FOR INCREASED INVESTMENT IN S&T
For India to continue its upward trajectory in S&T, a significant increase in financial resources is imperative. The importance of funding can be categorised into several critical areas:
- Research and Development (R&D): Adequate funding is necessary for the infrastructure, human resources, and technological tools required for research. Long-term projects, especially in fields like space exploration, AI, and biotechnology, demand sustained financial investment.
- Talent Retention: Competitive salaries and well-funded institutions are essential to keeping top talent in India. Without this, the country risks losing its brightest minds to nations offering better opportunities.
- Global Competitiveness: India’s ambitions to be a leader in key technologies—space, AI, biotech—hinge on financial resources. Countries that fail to invest risk falling behind in the global technology race.
- Infrastructure Development: Cutting-edge research requires modern labs, supercomputing facilities, and specialised equipment, all of which demand significant investment.
ROLE OF THE PRIVATE SECTOR: BRIDGING THE GAP
India’s private sector, despite being home to major global companies in pharmaceuticals, IT, and manufacturing, has not contributed to research at levels comparable to other nations. For India to close the funding gap, it must foster stronger collaboration between the public and private sectors.
Greater innovation and agility may define private sector investments. Private companies are often quicker to respond to emerging trends and bring new technologies to market. By increasing their investment in S&T, they can foster a more dynamic innovation ecosystem.
India’s growing startup ecosystem, particularly in AI, biotech, and fintech, requires venture capital and corporate partnerships. Public-private partnerships (PPPs) and innovation hubs can provide the necessary infrastructure for startups to thrive.
The establishment of the Anusandhan National Research Foundation (ANRF) in 2023 is a crucial step in the right direction. With a target of ₹500 billion to be raised over five years, 70% of which will come from non-governmental sources, the ANRF represents a significant effort to address the lack of private sector involvement in basic research. The challenge, however, lies in prompt and judicious channelling of these resources.
THE PATH FORWARD
India’s future in science and technology is full of promise but hinges on its ability to substantially increase investment in R&D. While the government has a central role, the private sector must step up as a significant contributor. A collaborative approach that integrates government funding, private investment, and international partnerships will be essential for building a sustainable and thriving S&T ecosystem.
As India stands on the cusp of becoming a global S&T leader, the need for bold financial commitments is more urgent than ever. The issue of funding gap has to be addressed by both the government and more importantly by the private sector if India has to truly realise its potential in science and technology, securing its place among the world’s most advanced nations.
The world’s most populous democracy and the fifth-largest economy has an opportunity to reimagine its science funding. It is vaguely there but merits far more intense focus and commitment.
The government is aware but is the private sector of this country listening?
*The writer, a Harvard educated civil servant, is a former Secretary to the Government of India. He also served on the Central Administrative Tribunal and as Secretary General of ASSOCHAM. He commands extensive expertise in the fields including Media and Information, Industrial and Labour Reforms, and Public Policy.
