Prelims level : Budget Mains level : GS-III Government Budgeting
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Why in News?

  • In an effort to stimulate investment in research and development (R&D), the Department of Science and Technology is mooting a fund that will match the contributions made by private companies in R&D.


  • The idea is to pool funds from a group of companies willing to invest in fundamental research, such as quantum computers or artificial intelligence, and whatever is invested government will match that.
  • The scheme will be coordinated through the department’s Science and Engineering Research Board, which funds a variety of basic science projects in several universities.
  • Public sector institutions form the lion’s share of India’s investment in R&D. In 2004-2005, private sector accounted for 28% of India’s research spend and in 2016-17 this increased to 40%. In most advanced economies, private R&D accounts for the bulk of investment in R&D.
  • It is well below that in major nations such as the U.S. (2.8), China (2.1), Israel (4.3) and Korea (4.2), according to a 2019 report by the Economic Advisory Council to the Prime Minister.

What is the Concern?

  • As a lower middle-income country, it is not surprising that India’s spending on R&D lags upper-middle income and high-income countries such as China, Israel, and the U.S.
  • However, it currently under spends even relative to its income level.
  • In fact, in 2015, there was a sizeable decline in R&D spending even as GDP per capita continued to Rise.
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