The announcement by Union Finance Minister Nirmala Sitharaman, in the interim Budget, that “A corpus of rupees one lakh crore will be established with fifty-year interest free [loans]” to provide “long-term financing or refinancing with long tenors and low or nil interest rates [to] encourage the private sector to scale up research and innovation significantly in sunrise domains”, is worth examining.
The private sector’s contribution to India’s overall research and development expenditure as a fraction of GDP has been low. In 2020-21, the private sector industry contributed 36.4% of the national gross expenditure on R&D (GERD), with the Centre (43.7%), State governments (6.7%), higher education (8.8%), and public sector industry (4.4%) accounting for the rest. In the same year, the overall amount was ₹1.27 lakh crore, so 36.4% comes to about ₹46,366.66 crore.
Some experts have invoked these figures alongside comparisons to the case in the world’s extant science ‘superpowers’, such as the Germany, South Korea, and the United States, where the private sector contribution as a percentage of the national GERDs is 67%, 79% and 75%, respectively.
