Public-Private Fund In Research and Development

Public-Private Fund In Research and Development

• To stimulate investment in research and development (R&D), the Department of Science and Technology is mooting a fund that will match the contributions made by private companies in R&D.
• The large, private sector companies and currently, a ₹40 crore target was on the anvil. The idea is to pool funds from a group of companies willing to invest in fundamental research, such as quantum computers or artificial intelligence, and whatever is invested government will match that
• A major beneficiary of such private sector funds could be the Indian Institutes of Technology.
• The scheme will be coordinated through the department’s  Science and Engineering Research Board, which funds a variety of basic science projects in several universities
• Though India is among the top five countries in terms of its output of scientific publications, it doesn’t match up in investments. The total expenditure on R&D has tripled in the last decade in nominal (revenue sans inflation) terms from ₹24,117 crores in 2004-­05 to an estimated ₹1,04,864 crore in 2016-­17. However, as a fraction of GDP, public expenditures on R&D has been stagnant between 0.6­0.7% of GDP over the past two decades. It is well below that in major nations such as the U.S. (2.8), China (2.1), Israel (4.3) and Korea (4.2), according to a 2019 report by the Economic Advisory Council (EAC) to the Prime Minister
• Public sector institutions form the lion’s share of India’s investment in R&D. In 2004-­2005, the private sector accounted for 28% of India’s research spend and in 2016­ 17 this increased to 40%. In most advanced economies, private R&D accounts for the bulk of investment in R&D
• Moreover, while the government is the major source of funds for R&D, it’s also the major user in terms of money consumed by public sector enterprises or Central institutions.
• As a lower middle­income country, it is not surprising that India’s spending on R&D lags upper­middle income and high­income countries such as China, Israel, and the U.S. However, it currently underspends even relative to its income level... In fact, in 2015, there was a sizeable decline in R&D spending even as GDP per capita continued to rise,

Source: The Hindu