₹1 Lakh Crore Fund to Boost Private Sector R&D Nears Approval

Sub : Sci

Sec: Msc

Why in News

The Government of India is finalizing an ambitious ₹1 lakh crore fund aimed at stimulating private sector investment in core research and development (R&D).

Details:

The fund will provide low-interest, long-term loans to private companies for the development of novel products and intellectual property.
Unlike previous R&D support schemes, this fund will be exclusively available for private enterprises and not for universities or academic institutions.

Low R&D Investment in India:

India’s total R&D spending is only 0.65% of GDP, significantly lower than that of scientifically advanced nations, which allocate between 1.5% and 3%.
The private sector in India contributes only 30%-36% of total R&D expenditure, compared to 75% in the U.S. and 77% in China.

Allocation of Funds:

The fund was first announced by Finance Minister in the Interim Budget (February 2024).
₹20,000 crore from this allocation has already been earmarked for the Department of Science and Technology (DST).
The newly established Anusandhan National Research Foundation (ANRF) is expected to play a key role in administering the fund.

Loan Structure and Terms:

Loans will be provided at near-zero interest rates.
The tenure for loans will range from five to seven years.
Unlike grants, companies will have to justify that their research will result in commercially viable products.
A professional evaluation body, independent of DST, will review project proposals before approval.
The scheme is sector-agnostic, covering industries such as space, pharmaceuticals, automotive, and energy.
However, sectors like information technology (IT) and other service-based industries may not qualify.

Anusandhan National Research Foundation (ANRF):

Established under the Anusandhan National Research Foundation Act, 2023.
Acts as the apex body to guide research and innovation in natural sciences, engineering, technology, environmental and earth sciences, health, agriculture, and their interfaces with humanities and social sciences.
Replaces the Science and Engineering Research Board (SERB), which was established in 2008 to promote basic research in science and engineering.
Provides high-level strategic direction for scientific research in alignment with the National Education Policy (NEP) guidelines.
Targets a corpus of ₹50,000 crore during 2023-28.
The Central Government has allocated ₹14,000 crore.
The remaining funds are expected from donations by public sector enterprises, private sector entities, philanthropic organizations, foundations, or international bodies.
Funds Structure: Comprises multiple funds, including:
- ANRF Fund: For salaries, allowances, and administrative purposes.
- Innovation Fund: To support outstanding creativity in supported areas.
- Science and Engineering Research Fund: For projects initiated under the previous SERB Act.
- Special Purpose Funds: For specific projects or research initiatives.
Chaired by the Prime Minister, who presided over the first meeting.
Early Career Research Grant (PM ECRG): Launched to support early career researchers, recognizing their vital role in scientific and technological progress.