Introduction
India's Gross Expenditure on Research and Development (GERD) reached a record ₹2.45 lakh crore (0.84% of GDP) in 2023–24. While this indicates substantial momentum and structural evolution in the domestic scientific ecosystem, national investment levels continue to lag significantly behind leading global innovators.
The Structural Shift in India's R&D Ecosystem
- Private Sector Ascent: According to the Department of Science and Technology, private industry contributed 51.8% of GERD in 2023–24—up from 33.8% in 2019–20—surpassing public sector expenditure (48.2%) for the first time in India's history.
- Institutional Restructuring: The enactment of the Anusandhan National Research Foundation (ANRF) Act, featuring an outlay of ₹50,000 crore over five years, along with the ₹1 lakh crore Research, Development and Innovation (RDI) Fund, introduces institutional mechanisms to provide long-term, low-cost risk capital.
- Tangible Output Expansion: India's innovation outputs have seen visible gains, with the country climbing to 39th position in the Global Innovation Index (2024) from 81st in 2015, alongside annual patent grants crossing the 100,000 mark in FY24.
Why India Lags Behind Global Peers
- Low Overall R&D Intensity: At 0.84% of GDP, India's R&D spend trails drastically behind global leaders such as Israel (5.7%), South Korea (4.9%), the United States (3.5%), and China (2.4%), remaining well below the global average of approximately 1.8%.
- Shallow Domestic Base: More than 70% of business enterprise R&D is propelled by foreign multinational Global Capability Centres (GCCs). In contrast, domestic corporate investment remains subdued, averaging less than 0.5% of annual turnover.
- Human Capital Deficit: India maintains only about 260 researchers per million population, in sharp contrast to 1,600 researchers per million in China and 4,400 in the United States.
- Academic and Sub-National Disconnect: Higher education institutions contribute a modest 12.6% of GERD, compared to an average of roughly 20% across OECD countries. Furthermore, state governments contribute a meager 4% to national R&D expenditure.
Way Forward
- Fiscal Incentivization: Reinstate weighted tax deductions (such as the earlier 200% benefit under Section 35(2AB) of the Income Tax Act) to crowd in private domestic corporate investment.
- Translational Infrastructure: Set up ANRF-backed Technology Transfer Offices (TTOs) across central and state universities with clear royalty-sharing frameworks to facilitate lab-to-market commercialization.
- Sub-National Matching Grants: Formulate a 1:1 Centre-State funding partnership to incentivize sub-national governments to establish dedicated regional R&D missions.
Conclusion
Realizing the vision of Viksit Bharat by 2047 necessitates transforming India from a consumer of technology into a prime creator of frontier innovations. Bridging the gap with global peers will require scaling GERD toward 2% of GDP through sustained private-sector participation, robust university research ecosystems, and decisive fiscal support.