GLOBAL EXPENDITURE ON R&D

1. Context

• According to UNESCO’s stats, the global expenditure on research and development (R&D) has crossed $1.7 trillion. Where does India stand in terms of spending on R&D? The most used indicator to measure country-wise investments in R&D is the gross domestic expenditure on R&D (GERD) as the percentage of gross domestic product (GDP).
• A comparison of the R&D spending of some of the countries representing different regions of the world and India in terms of GERD as a percentage of GDP (see graph) shows India to be a low spender (only 0.66 percent of the GDP) in comparison to the developed countries and emerging economic powers of East Asia.
• The percentage expenditure for the last couple of years is showing a downward trend.

3. Budget 2022-23 allocations of R&D

• The finance minister’s budget speech for 2022-23 contains two references to R&D related issues. One, defense R&D will be opened for industry, start-ups, and academia with 25 percent of the defense budget earmarked for such activities.
• The other is the identification of sunrise opportunities in areas like artificial intelligence,
  geospatial systems and drones, semiconductors, space, genomics and pharmaceuticals, green energy, and clean mobility systems.
• For R&D in these sunrise opportunities, in addition to efforts of collaboration among academia,
  industry and public institutions, government contribution will be provided.
• However, the budget has no extra provisions for R&D in the flagged sunrise opportunities.

4. Measures Required

• Economic survey 2020-21 suggested that the country needs to increase its GERD from around 0.7 percent to over 2 percent of its GDP as in the situation with the Western and East Asian economies.
• The survey suggested that the private sector needs to raise its share of spending from 37 percent to 68 percent of the total spending on R&D like the other high spenders.
• National Educational Policy (NEP) 2020 suggested the establishment of a National Research Foundation (NRF) to fund competitive, peer-reviewed grant proposals from universities, colleges, and institutions of higher learning.
• Budget 2021 proposed an allocation of Rs 50,000 crore over the next five years, however, in the actual budget, no such provision was made.
• Cater to the present and future needs by committing to raise the spending on R&D to 1 percent of the GDP.
• The amount of Rs 50,000 crore committed in the 2020-21 budget to establish NRF could be immediately used to plug the deficits in the extramural grants provided to the autonomous universities and Institutions by CSIR, DST, SERB, DBT, ICMR, ICAR, and other agencies.
• Globally, the most R&D-intensive areas funded by the private sector are pharmaceuticals and biotechnology, IT hardware and software, automobiles, materials and chemicals, and aerospace and defence.
• The ratio of private to public spending in R&D was 19:81 in 2001-02, it improved to 35:65 in 2011-12 but continues to stagnate since then. Higher spending in R&D by the private sector will happen as the manufacturing sector expands in the country.
• With increased allocations, joint R&D projects between public institutions and start-ups/ Industries can also be supported. Funding of projects could become comprehensive and cover their entire expenditure. Almost all developed countries follow this practice.
• Joint projects with some of the leading laboratories worldwide could also be funded by enhanced funding allocations in India.
• To make India self-reliant, the country requires the upgradation of human resources in R&D. Currently, there is a lack of adequate expertise in many emerging areas.
• In the next five to six years, around 5,000 students/scientists need to be trained at the doctoral and post-doctoral level in the best laboratories abroad in areas of R&D where India needs to do better for national prosperity and areas of strategic importance.
• If India has good relations with the economically developed democratic world, then it would help in collaborating on research on technology like India has with USA  and UK.
  Post-doctoral work in India should be encouraged by providing better remuneration to young scientists.
• The SERB (Science Engineering Research Board), that's already performing the job of funding projects on a competitive basis, can be upgraded to play the role envisaged for NRF. A virtual platform that will hold all the information on the projects granted with public funding could be developed for better information sharing.

5. Way Forward

For Premils & Mains