In the Interim Budget 2024-25, Union Finance Minister Nirmala Sitharaman put research and innovation at the centre of the pathway of India to be a developed nation by 2047, when it celebrates a hundred years of its Independence.
To emphasise the government’s focus on research and innovation, Sitharaman referred to Prime Minister Narendra Modi’s articulation and expansion of the famous slogan that India’s second prime minister, Lal Bahadur Shastri, gave in the 1960s. Shastri gave the slogan of ‘Jai Jawan, Jai Kisaan’.
In the 1990s, Atal Bihari Vajpayee —the first Bharatiya Janata Party (BJP) leader to become India’s prime minister— added ‘Jai Vigyaan’ to the slogan. Then, in 2019, Modi added ‘Jai Anusandhaan [Victory to Research]’ to it.
Echoing Modi’s remark, Sitharaman said in her Interim Budget speech that research and innovation would catalyse India’s growth, generate employment, and lead to development. She announced a corpus of Rs 1 lakh crore for scientific and technological research and development (R&D) activities in India.
“India is showing solutions through innovation and entrepreneurship of its people…Prime Minister Modi has furthered that to Jai Jawan Jai Kisan Jai Vigyan and Jai Anusandhan as innovation is the foundation of development,” said Sitharaman.
As Modi emphasises on the continuity theme in his third term, it is expected that the push for R&D will continue to drive the Budget 2024-25 that Sitharaman presents on Tuesday (July 23). While the Modi government has set eyes on boosting R&D with the initiative, it is the fine-print that will emerge in days to come as well as its implementation that will decide whether it will be a success.
India’s science & tech budget in numbers
India does not rank high in the numbers. This explains why Sitharaman announced the research initiative in her February Budget speech.
As against the global average of 1.8 per cent, India has been spending just around 0.64 per cent of its gross domestic product (GDP) on scientific R&D, according to reports.
This is not just behind the world leaders South Korea (4.8 per cent) and the United States (3.5 per cent), but is also behind countries that are relatively new to the R&D powerhouse scene.
China, which has in recent years transformed into an R&D hub from a mere contract-manufacturing centre, spends around 2.4 per cent and Germany spends 3.1 per cent, The Hindu reported.
The nature of R&D funding is also skewed in India. While the private sector is quite proactive abroad, the bulk of R&D funding in India comes from the government and that too the central government. The Hindu report said that the central government spends 43.7 per cent of all R&D in India compared to just 6.7 per cent of state governments and 8.8 per cent of higher educational institutions. The private R&D spending was 36.4 per cent as of 2020-21.
Of the R&D budget for the financial year 2022-23, the latest for which complete figures are known, the paper reported that 54 per cent of funds went to four government agencies: Defence Research and Development Organisation (30.7 per cent), Department of Space (18.4 per cent), the Indian Council of Agricultural Research (12.4 per cent), and the Department of Atomic Energy (11.4 per cent).
Expectations from Budget 2024-25 for science & tech
In addition to the push for the ambitious Rs 1 lakh crore R&D corpus that Sitharaman announced in the Interim Budget, the Modi government is expected to focus on emerging technologies, artificial intelligence (AI) research, production-linked incentive (PLI) schemes for R&D and manufacturing including semiconductors and other critical technologies, renewable energy technologies, and digital initiatives, among others.
The indications for these expectations are rooted in the Interim Budget in which Sitharaman hiked the scientific development allocation by more than 20 per cent.
In its pre-Budget report on expectations, Axis Securities said the government would keep a sustained emphasis on PLI schemes for emerging sectors. It said that the Atma Nirbhar Bharat initiative would continue to boost manufacturing and exports while controlling imports as per the commitment to sustainability through renewable energy and alternative technologies, and the expansion of infrastructure in areas such as defence, railways, roads etc.
The report further said that expectations are high for increased allocations towards digital infrastructure, AI, and cyber security at a time when the Modi government looks forward to bolster India’s position as a global tech hub.
The budget is also expected to “wholeheartedly support” the expansion of India’s digital public infrastructure (DPI), said the report.
The Modi government’s focus on digital transformation and initiatives like Digital India are fuelling the demand for data centres with hyper scalers playing a crucial role in this process, said the report.
At a time when concerns over the misuse of AI are mounting, as tools like deepfakes become easy to exploit, there are also expectations that the budget will push for the ethical adoption of AI.
Shekar Sivasubramanian, the chief executive officer of the non-profit Wadhwani AI, said that the upcoming budget can contribute by prioritising AI research, infrastructure, and policies that promote ethical AI practices and responsible deployment.
“The upcoming budget can address skill development in AI and machine learning (ML) through specialised training programs, incentives for skill development centres, and curriculum updates in collaboration with educational institutions,” said Sivasubramanian in a statement to Firstpost.
Sivasubramanian further said that AI is meant to be an empowering tool integrated across various sectors like healthcare, agriculture, and education and continued support and investment is required for it.
India’s journey with AI has been marked by innovation integrated responsibly into public systems. We look forward to continued support and investment in AI solutions that benefit society and foster collaboration between academia and industry,” said Sivasubramanian.
What’s the way forward?
Experts have said that a multi-pronged approach is needed which needs to start with hiking the science R&D spending as a share of the GDP.
Moreover, they have said that there is an issue of underspending even whatever amount is allocated currently. They have therefore said that the allocated funds need to be spent and bureaucratic processes need to be smoothened so that procurements of research materials can happen in the timeframe of researchers.
In ‘All Things Policy’ podcast of the Takshashila Institution, Shambhavi Naik noted that the real science funding and usage is hard to assess as not just the Union science ministry but other ministries as well, such as the commerce ministry at times, also grant R&D funds. She further highlighted that to whom funds are allocated is also difficult to track as R&D activities are spread across institutions under various ministries like science, health, education, etc.
Of the funds that are known to have been allocated, only 60-70 per cent are spent and the rest remains unspent and this underspending issue needs to be addressed as well, said Naik, the Head of Research at the Takshashila Institution.
While there are gaps, the government has been taking steps to address them. To address the gap of over-reliance on government spending, the government has set up the Anusandhan National Research Foundation (NRF) which would allocate up to Rs 50,000 for R&D purposes over the next five years and up to 70 per cent of these funds are to be sourced from the private sector.
In the Interim Budget, Sitharaman announced another corpus of Rs 1 lakh crore that would provide long-term low-cost or zero-cost loans for R&D purposes.
“For our tech-savvy youth, this will be a golden era. A corpus of Rs 1 lakh crore will be established with 50-year interest-free loan facility. The corpus will provide long-term financing or refinancing with long tenures and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” said Sitharaman.
Sitharaman also announced the launch of a scheme for the development of deep-tech capabilities in the defence sector. The finance minister is likely to state the continued focus of the government on research and innovation when the traditional innovators (the West) and the emerging innovators (China and Taiwan) are showing signs of fatigue in their economies and India is emerging as the next big leader on the global horizon.
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Budget 2024: Will focus on Anusandhan make India lead innovator by 2047?
