Budget 2024 | Government moots ₹1 lakh-crore corpus for research and development

Finance Minister Nirmala Sitharaman announces a corpus of ₹1 lakh crore for research and development in India's "sunrise sectors."

Signalling a commitment to research and innovation for India’s “tech-savvy youth,” Finance Minister Nirmala Sitharaman, in her Interim Budget speech on February 1, mentioned a corpus of ₹1 lakh crore, that would be available on ‘minimal or nil interest rates’ to “encourage” the private sector to invest in research and development in ‘sunrise sectors.’ It was not clear if this corpus was targetted at a specific Ministry or intended as a more broad-based encouragement to research.

Experts said that while it is a “welcome” development, it remained to be seen how the scheme would be implemented. “There are many possibilities at this juncture but I’m not aware of any specific discussions [on beneficiaries and implementation] and the ministries which will be involved. However, it is very good as it envisages both the public and private sector to invest in research and development,” V.K. Saraswat, Member, NITI Aayog (science and technology), told The Hindu.

Among the significant steps taken by the Science Ministry in 2023 was clearing the National Research Foundation Bill. To be piloted by the Department of Science and Technology (DST), this envisages an autonomous body with a corpus of ₹50,000 crore, of which nearly ₹36,000 crore will come from the private sector and non-governmental sources. A major long-standing concern of the government has been in getting private sector enterprises to invest in core research and development, with nearly three-fourth of such R&D expense now borne by the government. The DST has provisioned ₹2,000 crore in 2024-25 towards the NRF.

Whether the new corpus has a connection to the NRF is unclear. Allocations to civilian science departments, namely the DST, the Department of Biotechnology, the Council of Scientific and Industrial Research and the Ministry of Earth Sciences (MoES), were modest with the CSIR getting a 10% raise from the ₹5,746 crore allocated in 2023-24 to ₹6,323 crore and the DST a 1% raise over the ₹7,931 crore in 2023-24 to ₹8,029 crore.

The National Quantum Mission, a much talked about scheme of the DST that envisages developing critical technolgies using the principles of quantum mechanics and with applications in cryptography and computing, has for the first time been provisioned ₹2,819 crore — reflecting a commitment to making headway this year. In her speech, Ms. Sitharaman mentioned, again without details, “...A new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta.’ ” Deeptech is a buzzword that lacks a precise definition but refers to start-ups working towards proprietary technologies in the field of artificial intelligence and other esoteric research areas and requiring large, sustained research investment.

The Department of Biotechnology has seen allocations cut to ₹2,251 crore this year from ₹2,683 crore (2023-24) and MoES a cut from ₹3,319 crore to ₹2,521 crore. A senior official explained the cuts as occurring due to budgets for major programmes often being spread out over 3-5 years and the inability of ministries to spend budgeted amounts within the prescribed financial years. The Finance Ministry, in its overall assessment of ‘Research and Development’ spending (spanning multiple ministries), has allotted ₹13,208 crore for 2024-25, up from the ₹12,850 crore in 2023-24. The actual spending during 2023-24 (till December) was ₹12,943 crore.