A new Union budget is around the corner. This is the time for new ideas, for a giant leap forward, like in 1991.
Every prime minister, from Jawaharlal Nehru to Narendra Modi, has spoken of the importance of investing resources in science and technology. Our first PM was devoted to the development of science and technology, and to him goes the credit for starting India’s most successful scientific ventures in space research and atomic energy. He spoke at various times of his affinity for science and technology. He said, “And though circumstances made me part company with science, my thoughts turned to it with longing. In later years, through devious processes, I arrived again at science, when I realised that science was not only a pleasant diversion and abstraction but was of the very texture of life, without which our modern world would vanish away. Politics led me to economics, and this led me inevitably to science and the scientific approach to all our problems and to life itself.”
Still, nothing significant has happened in areas other than space and atomic energy and, to a limited extent, in defence. Since early times, governments in India have been talking about raising the spending on R&D to 2 per cent of the GDP, but it remains at a measly 0.6 per cent to 0.7 per cent. While inaugurating the Indian Science Congress at Bhubaneswar in 2012, Manmohan Singh said, “Over the past few decades, India’s relative position in the world of science has been declining, and we have been overtaken by countries like China. Things are changing, but we cannot be satisfied with what has been achieved. We need to do much more to change the face of Indian science.”
The present Prime Minister’s Economic Advisory Council, in a report titled ‘R&D Expenditure Ecosystem’, pointed out that several countries, including the US ( 2.8 per cent of GDP), China (2.1 per cent), Israel (4.3 per cent) and South Korea (4.2 per cent) were far ahead of India in spending on R&D for the future. The Council made important suggestions on how to move R&D to a higher level so that India’s growth is on a firm footing. In the 2022-23 budget, the Finance Minister announced the formation of a National Research Foundation with a corpus of Rs 50,000 crore, but thus far, there has been little progress.
We can take a leaf out of China’s book. They ratcheted up their R&D expenditures from 0.7 per cent of GDP in the 1990s to 2.1 per cent currently. China is now second only to the US in actual volume of spending on R&D in purchasing power parity (PPP) terms, and they are fast catching up. The total expenditure on R&D in China in PPP terms was USD 525.7 billion in 2019, almost ten times the amount spent by India — USD 58.7 billion (2018 figure). China employs 7,38,000 people in R&D compared to 1,58,000 in India. China’s objective is obvious. As their former minister for science and technology, Wan Gang, said, “China needs to enter the ranks of innovative countries and become a big technological innovation power by 2050.” It undertook a massive overhaul of science and technology in 2018 with the restructuring of 15 ministries, with further reforms in 2023.
There are also lessons to be learnt from our own experience. While other areas have generally languished, we have made astonishing progress in space and atomic energy. Besides investing liberally in these areas, we also gave almost total autonomy to the administration of the Space Commission and the Atomic Energy Commission. High-powered bodies, chaired by senior scientists and including the Minister of State in the PMO, Principal Secretary to the Prime Minister, Cabinet Secretary, Finance Secretary and leading scientists, were empowered to make decisions without the constraints of bureaucracy. The results are there for all to see.
There are other peculiar features of research in science and technology in India. The government sector accounts for more than half of India’s R&D (56 per cent), while in other countries, government spending is much less — China (15 per cent), Germany (14 per cent), the United Kingdom (7 per cent) and Japan (8 per cent). India tried incentivising the private sector with liberal income tax concessions, but most companies largely misused them. Another significant feature is that India spent 44 per cent of its R&D expenses on capital development, unlike China (0 per cent), the UK (0 per cent), and the US (O.2 per cent). The bulk of government money in R&D is probably going into building construction and acquiring real estate.
PM Modi has underlined the importance of science, technology, research, and development in building the foundations of a great Indian economy. He said, “We will explore the mysteries of science and harness the power of technology and innovation. We will realise the opportunities of the digital world. Our youth will learn more from — and with — each other.”
The Budget of 2024 could be the harbinger of a significant change in our approach to funding research and development. The FM talks to industry associations. So does the Revenue Department. This is the time for the FM to bring together the country’s top scientists who can generate many ideas. Let all scientific institutions be merged into one or two overarching bodies like the Space Commission and the Atomic Energy Commission and have similar autonomy.
To promote genuine research in the private sector, it would be desirable to mandate setting apart 2 per cent of the companies’ profits for research and development in the same manner as for corporate social responsibility. If any company or group cannot spend this amount, the unspent amount may be contributed to the National Research Foundation. The corpus of the NRF can be used to develop a centrally sponsored scheme available to state governments, centres of learning and research, and even corporates.
The construction of buildings and fixed assets should be excluded from expenditure figures on R&D. There is also a need to develop a research mentality in higher learning institutions, where India expends minimal resources.
State governments may be allowed to raise another half per cent of GSDP by way of loans to be exclusively used by the State Councils of Science and Technology for research and development projects approved by the National Research Foundation.
Let this Budget breathe new life into a languishing but essential sector to achieve our development goals!
The writer is former Cabinet Secretary and author of As Good as My Word: a Memoir
