Finance Minister Nirmala Sitharaman is set to present the Union Budget for a record seventh time, with the Economic Survey scheduled for release on July 22, Monday, at 2:30 p.m. As the nation prepares for her address, there is mounting speculation about whether this budget will signal a significant advancement in scientific investment.
India’s leaders, from Jawaharlal Nehru to Narendra Modi, have consistently stressed the importance of investing in science and technology. However, progress has always been lacking.
The interim budget for 2024-25 fell short of expectations within the scientific community. Despite the approval of a Bill to establish a National Research Foundation (NRF) to boost scientific advancement, the interim budget made no mention of the NRF’s allocation or progress.
Introduced under the National Education Policy (NEP) in 2020, the NRF aimed to centralize scientific research funding, replacing existing governmental agencies such as the Department of Science and Technology, Department of Atomic Energy, Department of Biotechnology, Indian Council of Agricultural Research, Indian Council of Medical Research, and the University Grants Commission.
In the Union budget for 2021-22, the Centre had announced a commitment of Rs 50,000 crore for the NRF over five years. However, the following year saw an allocation of just Rs 0.01 crore or Rs 1 lakh, and in 2023-24, the NRF was allocated Rs 2,000 crore, later revised to Rs 258.60 crore.
The Union Cabinet approved the NRF Bill in June 2023, signaling the establishment of the NRF and inviting attention to the next steps for its implementation. Despite this, Sitharaman’s recent speech made no mention of the NRF, leaving the scientific community disappointed and questioning the future of this crucial initiative.
India’s long standing goal of increasing spending on research and development (R&D) to 2% of GDP remains unmet, with current expenditure hovering between a modest 0.6% and 0.7%.
A recent report by the Prime Minister’s Economic Advisory Council, titled ‘R&D Expenditure Ecosystem,’ highlighted that India is significantly behind other nations in R&D spending. Countries like the US (2.8% of GDP), China (2.1%), Israel (4.3%), and South Korea (4.2%) have far outpaced India in investing in future scientific advancements.
Researchers have raised concerns about the neglect of basic research by successive Indian governments, stressing that a robust research system requires greater autonomy. An editorial in Nature suggests that one way to address the funding gap is by boosting science spending through increased contributions from businesses, similar to practices in other leading economies.
Despite spending just 0.64% of its GDP on R&D in 2020–21, according to the Department of Science and Technology (DST), the country boasts the world’s third-largest pharmaceutical industry by volume and has been a key supplier of affordable medicines and generic drugs during the COVID-19 pandemic.
Last year, India became the fourth nation to achieve a soft Moon landing and the first to land near the lunar South Pole. Additionally, India has the largest constellation of remote-sensing satellites globally.
From 2014 to 2021, India’s research output has been prolific, ranking just behind the United States and China. During this period, the number of universities increased from 760 to 1,113, and the network of Indian Institutes of Technology expanded with the addition of seven new institutes, bringing the total to 23. Two new Indian Institutes of Science Education and Research were also established.
These advances were achieved with relatively low R&D spending, raising questions about what could be accomplished with increased investment. The average R&D expenditure among 38 high-income OECD countries was about 2.7% in 2022, while China spent 2.4% in 2021, according to World Bank data.
Despite this, India’s R&D spending as a percentage of GDP peaked at 0.82% in 2009–10 before declining to its current level. Moving forward, it will be crucial for Modi 3.0 government to consider how to enhance R&D funding and leverage this investment to further strengthen India’s scientific achievements.
Currently, around 60% of India’s research funding comes from central and state governments and universities, while only about 40% is contributed by the private sector. This contrasts sharply with global trends, where private sector involvement is typically much higher.
In 2022, private sector contributions accounted for an average of 74% of R&D spending in OECD countries and 66% for the 27 members of the European Union. Despite India’s robust presence in sectors such as construction, information technology, manufacturing, and pharmaceuticals, its private sector has considerable room to increase its investment in research and development.