No quick fix – on increasing the share of private funding in the research and development in India| 21 July 2023 | UPSC Daily Editorial Analysis
What's the article about?
- It talks about the new proposed the National Research Foundation (NRF) Bill, 2023.
Relevance:
- GS3: Achievements of Indians in Science & Technology; Indigenization of Technology and Developing New Technology;
- Prelims
Context:
- The government is going to place a new bill, the National Research Foundation (NRF) Bill, 2023, in the monsoon session of the Parliament.
Analysis:
- Key features of the proposed bill:
- It will create a new, centralised body to fund research, with a budget of ₹50,000 crore, over the next five years.
- This new body will draw the bulk of its budget — ₹36,000 crore — from the private sector.
- For many years, India’s spending on research has lagged between 0.6%-0.8% of GDP, or lower than the 1%-2% spent by countries with an economic base reliant on science and technology.
- Status of the private sector funding in R&D in India:
- In countries such as China, the U.S. and Israel, the private sector contributed nearly 70% of the research expenditure whereas in India, this was only about 36% of India’s total research expenditure — roughly ₹1.2 lakh crore — in 2019-20.
- Therefore, the Centre reasons, the way to galvanise university research in India would be to attract more private money.
- CSR – a way to increase share of private sector:
- Private companies should be mandated to allocate part of their annual corporate social responsibility (CSR) obligation to the NRF.
- Data from the Ministry of Corporate Affairs show that during FY-2022, companies spent ₹14,588 crore as part of their CSR obligations.
- CSR trends suggest that nearly 70% of such funds were spent in education, health care, and sanitation projects.
- Moreover, many of the companies spend this on initiatives that are located within their own communities, with the government not having a say on how this must be spent.
CSR in India:
|
Way Forward:
- The relatively greater contribution of private sector research in many countries is because of sustained government support to universities and research institutions, that have then encouraged individuals to build companies, and institutions that saw value in investing in research and development.
- The challenge in India is not the absence of such companies but the fact that there are too few of them.
- Organisations such as the NRF should work to create conditions which incentivise the development of private sector organisations that see value in invention and developing proprietary technology.
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