Budgeting for Science: A Path to Progress (GS Paper 3, Economy)
Introduction
- India has long recognized the importance of investing in science and technology, with every prime minister from Jawaharlal Nehru to Narendra Modi highlighting its critical role.
- Nehru, in particular, laid the groundwork for the nation’s space research and atomic energy programs.
- Despite this legacy, India’s overall R&D spending remains low, between 0.6% and 0.7% of GDP, far short of the 2% target often discussed.
Global Comparison and India’s Position
Disparity in R&D Expenditure
- A comparison with other nations underscores India’s significant gap in R&D spending. Countries like the US (2.8% of GDP), China (2.1%), Israel (4.3%), and South Korea (4.2%) invest substantially more.
- China, for example, increased its R&D spending from 0.7% of GDP in the 1990s to 2.1% currently, becoming the second-largest spender globally in purchasing power parity terms.
- In contrast, India’s R&D expenditure was $58.7 billion in 2018, a small fraction compared to China’s $525.7 billion in 2019.
Lessons from Space and Atomic Energy Successes
Autonomy and Investment
India’s notable achievements in space and atomic energy provide valuable insights. These sectors benefited from liberal investment and significant autonomy. The Space Commission and Atomic Energy Commission, led by senior scientists with decision-making power free from bureaucratic constraints, exemplify successful models. This autonomy has been instrumental in driving progress and achieving remarkable successes.
Challenges in R&D Structure and Private Sector Involvement
Government vs. Private Sector Contribution
- In India, the government accounts for 56% of R&D expenditure, unlike other countries where government spending is much lower.
- Attempts to incentivize private sector R&D through tax concessions largely failed due to misuse of benefits by companies.
- Additionally, 44% of India’s R&D expenses go towards capital development, unlike countries like China and the UK, which spend almost nothing in this area.
- This misallocation suggests that much government R&D funding is directed towards construction and real estate rather than genuine research.
Future Directions and Budget Considerations
Role of the Upcoming Union Budget
- The upcoming Union Budget presents an opportunity for significant advancement in science and technology.
- Prime Minister Modi has emphasized the importance of science, technology, research, and development in building a robust economy.
- The Finance Minister, in collaboration with top scientists, can introduce transformative measures.
- One suggestion is to merge all scientific institutions into a few overarching bodies, similar to the Space and Atomic Energy Commissions, granting them substantial autonomy.
Encouraging Private Sector Involvement
- To promote genuine private sector research, a mandate requiring companies to allocate 2% of their profits to R&D, similar to corporate social responsibility, could be introduced.
- Unspent funds could be directed to the National Research Foundation (NRF), which would support state governments, educational institutions, and corporations in R&D initiatives.
- Additionally, excluding construction costs from R&D expenditure figures and fostering a research mentality in higher education institutions are crucial steps.
Supporting State-Level Initiatives
- State governments could be allowed to raise additional funds for R&D by increasing their gross state domestic product (GSDP) allocation through loans, exclusively for research projects approved by the NRF.
- This would enable state-level councils to undertake significant R&D initiatives, contributing to national development goals.
Conclusion
- Investing in science and technology is vital for India’s growth and development.
- The upcoming Union Budget could mark a turning point by implementing bold measures to enhance R&D expenditure, foster private sector involvement, and streamline scientific institutions.
- By learning from past successes and addressing current challenges, India can achieve significant advancements in science and technology, driving economic and social progress.
