India's Performances in Research and Development (R&D)

Why in news?

Union Budget 2023-24 spurs research and development with the focus on ‘Viksit Bharat’.

How India fares in R&D?

• India is on track to become the world’s third-largest economy.
• Increase in patent- India saw a significant rise in patent grants.
  • It increased from fewer than 25,000 in FY20 to nearly 100,000 in FY24.
• Growth in patent filings- India shows increases in patent filings.
  • World Intellectual Property Organisation – India achieved the highest growth (31.6%) in patent filings in 2022.

The World Intellectual Property Organization (WIPO) is a United Nations agency that protects and promotes intellectual property (IP) rights around the world.

• Improved global standings- As per Global Innovation Index India improved its position from 81^st place in 2015 to 40^th in 2023.
• India moved to 9^th place in the Nature Index 2023, surpassing countries like Australia and Switzerland.

The Nature Index is a database that tracks institutions and countries/territories and their scientific output since its introduction in 2014.

• High-quality research articles- India’s share of high-quality research articles rose by 44% from 2019 to 2023.

What are the prevailing issues in India’s R&D sector?

• Low investment- Indian firms invest much less in R&D compared to global firms.
  • The Economic Survey 2023-24 pointing out the stark contrast between Indian and global R&D efforts.
• India’s R&D investment as a percentage of GDP remains low, standing at just 0.64%.
• It lags significantly behind China (2.41%), the United States (3.47%), and Israel (5.71%).
• Lack of ambition- Despite economic growth, there is a lack of ambition within India's business sector to invest in R&D.
• Limited private sector contribution- Their contribution to India’s Gross Domestic expenditure on R&D (GERD) is only 36.4%.
• It is much lower than China (77%) and the United States (75%).

Gross domestic expenditure on research and development (GERD) is a measure of the total financial resources spent on research and development (R&D) within a country.

• Lack of Indian innovation - There is indeed a lot of cutting edge R&D done in India but not by Indian companies but by the global capability centres (GCCs) of foreign companies.
• Low R&D Intensity- A recent analysis by the Foundation for Advancing Science and Technology (FAST) revealed that the global R&D intensity is 2.8 times higher than that of Indian firms.

R&D intensity measures the ratio of a firm's R&D investment to its revenue. This ratio reflects the percentage of revenue reinvested in research and development.

What are the provisions for R&D in Union Budget 2024-25?

• It has a separate priority entitled “Innovation, Research and Development”.
• The space sector has received a massive boost.
• Other priority areas, such as “Productivity and Resilience in Agriculture”, “Energy Security”, and “Manufacturing and Services”, also provide research and development opportunities.
• It also spurs research and development in important areas such as climate-resilient agriculture, critical minerals, miniature and modular nuclear energy technology, energy-efficient technologies, etc.
• The proposed “Critical Minerals Mission” and the exemption of customs duties on 25 critical minerals will significantly boost critical minerals research.
• Water supply, sewage treatment and solid waste management also figure as priority areas.
• In agriculture, the research focus is on productivity and climate resilience.
• The angel tax abolition is a major incentive for startups raising private capital.

What lies ahead?

• Encourage private sector in R&D to make real progress and enhance its global competitiveness.
• Operationalisation of the Anusandhan National Research Foundation (ANRF) for basic research and prototype development with a corpus of Rs 1 lakh crore will pave the way for private sector-driven research and innovation.

Reference

Swarajyamag | India’s R&D Crisis