Amid the fanfare surrounding the Unified Pension Scheme, the Cabinet’s approval of “Vigyan Dhara”, a Central Sector Scheme, was largely overlooked, receiving minimal attention despite its significance. This is part of the larger agenda of the Union government to push for research and development (R&D) in India.
With an outlay of Rs 10,579.84 crore for the 15th Finance Commission period (2021-22 to 2025-26), this unified scheme encompasses three strategic pillars: S&T Institutional and Human Capacity Building, Research and Development, and Innovation, Technology Development, and Deployment. Vigyan Dhara is poised to significantly enhance the efficiency of resource allocation and operational synergy, leading to a more streamlined and impactful Science, Technology, and Innovation (STI) ecosystem.
The scheme’s implications are also significant: it will elevate the nation’s R&D capabilities by equipping academic institutions with cutting-edge laboratories, foster international collaboration in frontier research areas, and expand the Full-Time Equivalent (FTE) researcher base. Furthermore, the focus on gender parity in S&T, through targeted interventions, is expected to contribute to a more inclusive research environment.
This was preceded by the establishment of the Anusandhan National Research Foundation (ANRF). The ANRF is designed to seed, grow, and promote interdisciplinary research across various sectors, including natural sciences, engineering, technology, health, agriculture, and environmental sciences. Its long-term vision is to foster innovation throughout India’s universities, colleges, research institutions, and laboratories.
One of the foundation’s key objectives is to correct the longstanding issue of insufficient research infrastructure at Indian universities, particularly state institutions. These institutions have historically struggled with inadequate funding and bureaucratic inefficiencies. By integrating these universities into a national R&D framework, the ANRF seeks to bridge the gap between teaching and research, a persistent problem in the Indian education system.
However, we need to do more. Research and development (R&D) investment is a fundamental prerequisite for economic growth because it drives innovation, enhances productivity, and fosters competitiveness. R&D leads to the creation of new technologies and processes that improve efficiency across various sectors, from manufacturing to services. These advancements enable businesses to produce more with less, reducing costs and opening up new markets. Moreover, R&D attracts skilled talent and stimulates high-value industries, contributing significantly to GDP growth. Countries prioritising R&D investment, such as South Korea and Germany, have consistently shown higher economic growth rates, demonstrating the critical role R&D plays in sustaining long-term economic prosperity.
Despite this, India’s commitment to this ideal is shockingly inadequate. India’s R&D spending has languished at a mere 0.7 per cent of its GDP for over two decades. This figure pales in comparison to the investments made by leading economies: Israel spends 4.93 per cent, South Korea 4.64 per cent, Japan 3.26 per cent, and Germany 3.09 per cent of their GDP on R&D.
Consider this: China spends 2.41 per cent of its GDP on R&D, with plans to increase this by 7 per cent annually as per its 14th Five-Year Plan. The United States and Israel, at 3.47 per cent and 5.71 per cent respectively, far outstrip India’s meagre contributions. These nations understand that R&D is not just a sectoral expenditure but the lifeblood of innovation, driving economic competitiveness and national security.
The disparity is even more glaring when examining the role of the private sector. In India, the private sector contributes only 36.4 per cent of the total R&D expenditure, compared to 77 per cent in China and 75 per cent in the United States. This lack of private investment in innovation is a recipe for stagnation, limiting India’s ability to compete globally in critical areas like artificial intelligence, biotechnology, and environmental sciences.
One reason for this is the absence of industry-academic partnerships in India. Collaboration between industry and higher education institutions (HEIs) is central to driving innovation and economic growth. This collaboration creates a symbiotic relationship where academic research fuels industrial innovation, and industries, in turn, provide financial support and practical applications for academic discoveries.
In the US, the “Triple Helix Model” emphasises the interaction between academia, industry, and government, encouraging universities to play a central role in innovation ecosystems by facilitating technology transfer, creating spin-offs, and collaborating with industries on R&D projects. The Bayh-Dole Act of 1980, which allows universities to retain intellectual property rights on inventions developed through federally funded research, significantly incentivized universities to commercialize their research. This framework has led to the creation of technology transfer offices (TTOs) that manage patents and licences, playing a crucial role in fostering industry-academia partnerships.
The government has aggressively promoted industry-academia collaboration in China as part of its national innovation strategy. Initiatives like “Made in China 2025” and the Thousand Talents Program encourage universities to collaborate with industries to develop cutting-edge technologies supported by substantial government funding. This has led to a significant rise in patents and high-tech innovations from Chinese institutions. Chinese universities focus increasingly on applied research driven by market needs, creating an environment conducive to industry-academia partnerships.
In contrast, Indian universities and research institutions often operate in silos, with limited engagement with the private sector. This separation is partly due to the traditional focus on theoretical research over applied research, which limits the relevance of academic work to industry needs. Additionally, the absence of strong technology transfer offices (TTOs) in Indian universities exacerbates this issue, as these institutions lack the infrastructure and expertise to commercialise research effectively. The limited funding for collaborative research in India, combined with less favourable financial incentives such as the patent box regime, further diminishes the motivation for both academia and industry to pursue joint ventures.
According to the Prime Minister’s Science, Technology, and Innovation Advisory Council (PM-STIAC), a staggering 99 per cent of India’s nearly 40,000 higher education institutions (HEIs) fail to research. This includes both those focused on social sciences and those in the STEM fields. This means that the vast majority of HEIs contribute little to no knowledge creation, effectively squandering India’s potential for research and innovation. Even more concerning is that less than 1 per cent of these institutions are shouldering the burden of the country’s scientific advancements.
The situation is further compounded by issues related to the quality of research output and the inadequate commercialisation of innovations, which hinder the diffusion of knowledge and stifle the nation’s overall progress in science and technology. This underutilisation of intellectual resources is a significant roadblock to India’s aspirations of becoming a global leader in innovation.
Another impediment for HEIs is the bureaucratic hurdles they face in doing research. In recent years, the Union government has initiated several measures to enforce fiscal discipline across states and educational institutions, with a particular emphasis on increasing transparency and accountability in financial management. While these initiatives are well-intentioned, the application of certain financial regulations has inadvertently undermined the research capabilities of premier institutions like IISc, IITs, and IISERs. Notably, these policies were implemented without adequately considering the unique requirements of research and development (R&D), leading to significant disruptions in the research ecosystem.
For instance, the introduction of the Treasury Single Account (TSA) system has limited the flexibility of these institutions to utilize the interest accrued on research grants, which previously provided a valuable source of additional funding for ongoing projects. Reallocating these funds to the central exchequer effectively diminishes the financial autonomy of publicly funded higher education institutions (HEIs), constraining their ability to manage and sustain research initiatives.
Moreover, implementing the TSA has exacerbated issues related to the flow of research funds, as evidenced by the challenges faced at institutions like IIT Delhi. The shift to a “zero-balance” account system under TSA has removed the buffer institutions previously relied on to cover overhead costs, such as administrative expenses, infrastructure maintenance, and utility charges. This transition has delayed the disbursement of research funds and introduced inefficiencies in the procurement process, particularly for high-end scientific equipment.
The requirement for maintaining a zero-balance account and the additional bureaucratic steps involved in fund transfers have created bottlenecks, impeding the timely execution of research projects. Furthermore, the reduction in direct grants for infrastructure development has compelled HEIs to resort to loans from the Higher Education Financing Agency (HEFA), which places additional strain on their already limited internal resources. This confluence of financial constraints poses a significant threat to India’s aspirations of establishing itself as a global leader in scientific research and innovation, highlighting the need for a more nuanced approach to fiscal reforms in the research sector.
Cultural and perceptual barriers also play a role in limiting industry-academia collaboration in India. There is often a cultural gap between academia and industry, where academic institutions may prioritize publications and theoretical work over practical, industry-oriented research. This cultural divide limits the scope of meaningful collaboration. Moreover, the perception that academic research is less aligned with market needs deters industries from investing in university-led projects. In contrast, academia is seen as a critical driver of innovation in the US and China, with research outputs closely aligned with industry requirements.
India needs comprehensive reforms to replicate the success seen in the US and China. Strengthening institutional frameworks by establishing robust TTOs within universities, incentivising applied research through favourable tax regimes, and promoting industry-academia networks are crucial steps. Additionally, the Indian government could emulate China’s strategy by establishing innovation hubs that co-locate universities with industries, supported by substantial public funding. India’s investment in R&D should also increase to 1 per cent of the GDP in the near term.
Aditya Sinha (X:@adityasinha004) is OSD, Research at Economic Advisory Council to the Prime Minister. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect News18’s views.
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