Why in the News?

The urgency stems from the recognition of India’s R&D investment gap and its reliance on public funding. Key reasons for the current focus include:

• Addressing Policy Deficiencies: India’s GERD, at approximately $0.64\%$ of GDP, lags significantly behind economic rivals (e.g., China at ~2.4%, US at ~3.5%, South Korea at ~4.8%).
• Rebalancing Funding Sources: The Central Government currently bears $\sim 44\%$ of GERD, while the private sector contributes only ~36%. This contrasts sharply with developed economies where the private sector typically funds over 70% of R&D, driving market-relevant innovation.
• The New Financial Mechanism: The launch of a ₹1 lakh crore R&D corpus (often referred to as the RDI Scheme, a part of the ANRF framework) is a strategic step. This fund aims to de-risk private R&D through low-interest, long-term loans, directly addressing the private sector’s reluctance for capital-intensive, high-risk research.

The Economic Imperative and Global Benchmarks

India’s economic future is tied to its ability to transition from a service-driven economy to a knowledge and technology-driven manufacturing hub.

1. The GERD Challenge and Implications

The low GERD is not merely a number; it reflects a systemic inability to create high-value Intellectual Property (IP), which results in:

• Technology Dependence: Continued reliance on importing high-end technology, especially in strategic sectors (e.g., semiconductors, specialized machinery).
• Low Innovation Output: While India has improved its ranking in the Global Innovation Index (GII) (currently 40th), its output of patents-per-revenue remains significantly lower than global peers.
• Fragmented Research: Public-funded research often focuses on curiosity-driven science, which, while valuable, may not always have a direct, rapid commercial application.

2. Comparative Analysis of R&D Funding

Economy	GERD as % of GDP (Approx.)	Private Sector Share in GERD (Approx.)	Key Strategy
South Korea	>4.8%	>75%	Government-led strategic funding + Large Chaebols (Conglomerates)
USA	>3.5%	>70%	Defence and Health spending + Strong University-Industry Linkages
China	>2.4%	>77%	State-directed investment in Frontier Technologies
India	~0.64%	~36%	Government dominance + New Focus on Private Capital & HEIs

The Institutional Pillar – ANRF

The Anusandhan National Research Foundation (ANRF), established under the ANRF Act, 2023, is the central mechanism to transform the R&D landscape.

Pointers:

• Apex Statutory Body: ANRF acts as the apex body providing high-level strategic direction for scientific research, in line with the National Education Policy (NEP) 2020.
• Unified Funding Mechanism: It unifies the currently fragmented public research funding landscape (subsuming bodies like the Science and Engineering Research Board – SERB).
• Private Capital Mobilization: ANRF is tasked with mobilizing a total fund of ₹50,000 crore over five years (2023-2028), with an ambitious ~70% expected to come from the private sector and non-governmental sources.
• Focus Areas: It prioritizes funding for interdisciplinary, translational, and high-impact research aligned with national missions in areas like Artificial Intelligence (AI), Quantum Technologies, Semiconductors, Health, and Climate Change.
• Democratization of Research: A key objective is to build research capacity in State Universities and private HEIs, moving the research culture beyond the elite IITs and central institutions.

Bridging the Academia-Industry Divide

The success of the GERD target depends critically on fostering genuine, sustained collaboration between universities and industry.

1. Industry-Centric Policy Tools

• R&D-Linked Financial Tools: The new ₹1 lakh crore fund for low-cost, long-term loans acts as a powerful financial lubricant.
• Tax Incentives: Modernizing R&D tax incentives, linking them explicitly to collaborations with accredited HEIs, and focusing on measurable IP output rather than just input expenditure.
• Mandated R&D Outlay: Encouraging or mandating that large companies in strategic sectors (Pharma, Auto, Electronics) dedicate a specific percentage of their revenue or even a portion of their CSR funds towards academic research collaborations.

2. Academic/HEI Reforms (as per NEP 2020)

• Industry Relation Cells (IRCs): Universities must set up dedicated IRCs/Technology Transfer Offices (TTOs) to professionalize engagement and manage IP rights.
• Faculty Immersion and ‘Professor of Practice’: Faculty exchange programs where professors spend time in industry and industry experts (Professors of Practice) teach in universities ensure that curriculum and research focus remain industry-relevant.
• Co-Designed Curriculum: Industry must actively participate in co-designing curricula and implementing mandatory, structured internships to reduce the employability gap.

3. Overcoming Cultural and Structural Challenges

• Cross-Purpose Conflict: Academics prioritize publications and fundamental knowledge, while industry seeks applied solutions and short-term profits. Clear contracts and mutual agreements on the scope and timeline of deliverables are essential to resolve this.
• IP Conflict: The most significant friction point is the Intellectual Property (IP) ownership. Universities want the right to publish for academic promotion, while industry demands proprietary secrecy for market advantage. Clear, pre-agreed IP sharing models (e.g., joint ownership, licensing) must be standardized.
• Bureaucracy and Speed: University procurement and administrative processes are often slow, which frustrates the industry’s need for speed and agility. ANRF’s single-window system aims to address this.

Conclusion: Securing India’s Technological Sovereignty

India is at a critical juncture where sustained economic growth is impossible without indigenous technological capacity. The push to raise GERD to 2% of GDP, with 50% contribution from the private sector, is not just a financial target—it is a national mission for technological sovereignty. The ANRF provides the institutional architecture, the ₹1 lakh crore fund provides the financial incentive, and the NEP provides the human resource reform. Success hinges on a sustained political will to overcome cultural inertia and bureaucratic friction, making India a global leader not just in consumption, but in cutting-edge creation.

Source: India needs research pipelines – The Hindu

UPSC CSE PYQ

Year	Question
2013	It is argued that the strategy of inclusive growth is intended to meet the objectives of inclusiveness and sustainability together. Comment on this statement.
2014	Foreign Direct Investment (FDI) in the defence sector is now set to be liberalized. What influence this is expected to have on Indian defence and economy in the short and long run?
2015	The nature of the economic relationship between the government and the private sector is a matter of debate. Discuss.
2016	Justify the need for FDI for the development of the Indian economy. Why is there a gap between MOUs signed and actual FDIs? Suggest remedial steps to be taken for increasing actual FDIs in India.
2018	How can the ‘Digital India’ programme help farmers to improve farm output and income? What steps has the government taken in this regard?
2019	With reference to the ‘Atal Innovation Mission’, which of the following statements is/are correct? (Prelims-linked, but mains-relevant for discussion) – Discuss its role in fostering innovation.
2020	Explain the meaning of investment in an economy in terms of capital formation. Discuss the factors to be considered while designing a concession agreement between a public entity and a private entity.
2021	“Investment in infrastructure is essential for more rapid and inclusive economic growth.” Discuss in the light of India’s experience.
2022	Why is Public Private Partnership (PPP) required in infrastructural projects? How has the government of India been facilitating PPPs in infrastructure?
2023	Faster economic growth requires increased share of the manufacturing sector in GDP, particularly of MSMEs. Comment on the present policies of the Government in this regard.
2024	What is the status of digitalization in the Indian economy? Explain the problems faced in this regard and suggest improvements.