The Union Cabinet on June 28 gave approval to a new science research set-up, the National Research Foundation. A bill would be placed in the Monsoon Session of the Lok Sabha this month to create the NRF. This will replace the Science and Engineering Research Board (SERB) that was set up in 2008, again through an Act of Parliament. It appears that former Prime Minister Manmohan Singh in 2008 and Prime Minister Narendra Modi in 2023 seem to be taking the National Science Foundation (NSF) in the US as their model.
According to the government, the scope of the NRF will be far wider than that of the SERB, and as it involves several ministries, the prime minister will be the ex officio chairman, and the Union ministers for science and technology and education would be ex-officio vice presidents. Modi is an enthusiast for changing and reorganising things because he feels that things are changing rapidly and there is a need to upgrade and expand institutions and processes. It is not necessary to debate the merits and demerits of the prime minister’s penchant for moving and shaking existing things. What is of greater interest is whether the NRF would improve the state of scientific research and development in India.
India as a developing economy has forever struggled to allot enough money for research and development, and it does seem that even after India’s ability to spend on strategic areas has improved by leaps and bounds, especially in the last 25 years, India’s R&D spend has remained low and its spend on education has been inadequate. R&D expenditure as a proportion of the Gross Domestic Product (GDP) was 0.8% in 2008–09 and 0.7% in 2017–18.
According to a study by NITI Aayog and the Institute of Competitiveness, India’s R&D expenditure is one of the lowest in the world. Even in the BRICS group, India’s Gross Domestic Expenditure on Research and Development (GERD) is at the bottom, with a figure of 1.2% for Brazil, 1.1% for Russia, more than 2% for China, and 0.8% for South Africa. The issues are more complex than these figures reflect because, except for China, the other three countries have manageable populations, and therefore the number of people engaged in scientific research and the money spent on research projects are of different proportions. The US spends 2.9% of its GDP on R&D, Sweden spends 3.2%, and Switzerland spends 3.4%.
The focus of research in Sweden and Switzerland is narrower. Israel, which has the highest R&D spending at 4.5% of the GDP, focuses more on defence and agriculture. India, like the US and China, has to spread its R&D rather thinly because it covers a wider spectrum.
The more interesting aspect of the proposed NRF, as explained by Union Minister for Information and Broadcasting Anurag Thakur at the cabinet briefing, was that the NRF will have a Rs 50,000 crore fund for a five year period, and of this, the government’s contribution would be Rs 14,000 crore, and the remaining Rs 36,000 crore would come from the private sector and other sources. Thakur did not specify whether this would include funding from foreign sources as well. He also underscored the fact that the research priorities would be frontier, high-impact, strategic, and need-based areas. Comparatively, then, the R&D spend in India remains far less than in other major economies. The question is whether a Rs 50,000 crore spread over five years is impactful or not and whether India should be focusing on certain key areas. These are difficult issues, and every decision taken with the best intentions can turn out to be lopsided.
The more puzzling thing about the NRF outlay is that the government expects the private sector to spend about two-thirds of the Rs 50,000 crore on R&D. The experience in India is that the private sector spends little or nothing on R&D. In the US, two-thirds of the R&D spend is done by the private sector. Will the American model work in India? Apart from questions of research culture and commitments to R&D, the private sector spends more on R&D because businesses reap huge benefits—read profits—from R&D breakthroughs. It also implies that the private sector invests in high-end R&D, and this must be true especially for the big pharmaceutical companies. The Indian private sector does not seem to be rich enough to invest in R&D. If the private sector occupies more space in the economy and its share of GDP is higher, then perhaps businesses would invest in R&D. Industry and services sectors contribute 80% of the GDP, and since the Indian GDP is US$ 3.3 trillion, the share of industry and services would be a little more than US$ 2 trillion. The profit margins are perhaps not high enough to be ploughed into R&D. The return on capital in the private sector in gross value addition (GVA) is 36.3%, while its share of wages is 35.2% between 2012 and 2021, according to an India Ratings and Research study.
India still has the difficult task of increasing the size of its economy if it is to overcome its challenge of spending more on R&D. It would seem that India would need to become a US$10 trillion economy for it to be able to spend more on R&D. This is not going to be a smooth ride, and there will be conflicts among the scientists themselves about what is to be prioritised. It is to be seen as part of the process, and no attempt should be made to impose top-down decisions. Ultimately, choices have to be made, but that should come after the debate. Though the ultimate criterion that governments will use is national interest, there has to be an element of pushing the frontiers of knowledge and not just national interest.
(The writer is a New Delhi-based
political commentator)