A special session was held to discuss India’s Research and Development (R&D) expenditure eco-system during the Global launch of Global Innovation Index (GII) – 2019 in New Delhi today.

Investments in R&D are key inputs in economic growth. The impact of this is proven on productivity, exports, employment and capital formation. India’s investment in R&D has shown a consistent increasing trend over the years. However, it is a fraction of India’s GDP, it has remained constant at around 0.6% to 0.7% of India’s GDP. This is below the expenditure of countries like the US (2.8), China (2.1), Israel (4.3) and Korea (4.2).

Government expenditure, almost entirely the Central Government, is the driving force of R&D in India which is in contrast to the advanced countries where private sector is the dominant and driving force of R&D spend. There is a need for greater participation of State Governments and private sector in overall R&D spending in India especially in application oriented research and technology development.

The special session was attended by Prof. K Vijay Raghavan, Principal Scientific Advisor to the Government of India, Ratan Watal, Member Secretary, Economic Advisory Council to the Prime Minister (PMEAC), Seema Bahuguna, Secretary, Department of Public Enterprises, Dr. Arabinda Mitra, Scientific Secretary, Office of Principal Scientific Adviser to Government of India and B.N. Satpathy, Senior Consultant, PMEAC.

Speaking on this occasion Secretary, Department of Public Enterprises said that India’s R&D story is at an interesting juncture where public sector units owned by the Government are geared up to play an important role. During the interaction with CPSEs in April 2018 in the CPSE Conclave in Delhi the Prime Minister of India had underlined that there should be greater emphasis on collaborative R&D by the CPSEs with focus on partnerships with Indian Institute of Technologies and Universities. After that interaction with Prime Minister of India it has now been mandated that all CPSEs will set up innovation cells which will work on market oriented research informed Secretary, Seema Bahuguna.

One hundred fifty-four such innovation cells have been setup by CPSEs where research is on like the NALCO MIDHANI Lithium - Aluminium Alloy Plant in Odisha, research is being conducted by Bharat Heavy Electricals Limited on generation of methanol from high ash Indian coal and Hindustan Aeronautics Limited is working on aero engines for various types of aircrafts/ helicopters for use by defence forces.

Secretary, Public Enterprises further informed that from the year 2014-15 to 2017-18 there has been an increase of 116% in R&D spending by CPSEs.  But the need of hour is that all CPSEs must come on board for higher spend on R&D and not just CPSEs of the petroleum and power sector, who are the biggest spenders in R&D, she further said.

The report has been compiled by PMEAC and inputs for the report have been taken from various stakeholders including industry, academia and government.

After the release of the report, Ratan Watal, Member Secretary PMEAC, informed that the objective of the report is to address the data gaps in compiling R&D data so that up to date data on R&D is available in order to reflect India’s true rank globally. The second objective is to examining expenditure trends in various sector and their short coming. The final objective is to lay down the road map for achieving the desire target of R&D spend by the year 2022.

He further said that India needs to re-double its efforts to improve its ranking in the science and research ecosystem by increasing the national expenditure on R&D. The growth in R&D expenditure should be commensurate with the growth of GDP and should reach at least two percent of GDP by 2022.

R&D expenditure increase urged to meet international standards and improve national innovation ranking through greater private and state participation. The report notes that Central Government funding chiefly drives India's R&D expenditure and calls for greater State Government and private sector participation, especially in application oriented research. It documents CPSE action-mandated innovation cells (154 established) and rising CPSE R&D spend between 2014-15 and 2017-18-and sets three objectives: close R&D data gaps, examine sectoral expenditure trends and shortcomings, and roadmap increased national R&D spending aiming to reach at least two percent of GDP by 2022.