GS Paper 3: Science and Technology
Context: According to data released by the Department of Science and Technology (DST), India’s Gross Expenditure on Research and Development (GERD) rose to 0.83% of GDP in 2021–22, crossing the 0.8% threshold for the first time since 2009–10.
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Key Points on India’s R&D Spending
- Sharp Increase in R&D Expenditure: GERD rose from ₹1.33 lakh crore (2019–20) to ₹1.27 lakh crore (2020–21) due to the pandemic, before increasing by 53% to ₹1.95 lakh crore (2021–22).
- It further increased to ₹2.13 lakh crore (2022–23) and ₹2.45 lakh crore (2023–24).
- Private Sector Contribution: Private industry’s share in GERD increased from 36.4% (2020–21) to 45.5% (2021–22), 48.0% (2022–23) and 51.8% (2023–24).
- For the first time, businesses contributed more to India’s R&D expenditure than all levels of government combined.
- Industry-Led Growth: Private sector R&D expenditure increased from ₹43,800 crore (2017–18) and ₹46,700 crore (2018–19) to ₹44,800 crore (2019–20) and ₹46,400 crore (2020–21).
- It nearly doubled to ₹88,600 crore (2021–22) and further rose to ₹1,26,800 crore (2023–24).
- Main Driver: Union budget allocations to major science agencies such as DST, DBT, ISRO and the Department of Atomic Energy increased only incrementally, indicating that the surge in GERD was primarily driven by private-sector investment.
- Expanded Coverage of R&D Statistics: DST, through the National Science and Technology Management Information System (NSTMIS), compiles India’s R&D statistics using UNESCO and OECD methodologies.
- The survey coverage has been expanded to include multinational companies and enterprises outside the DSIR-recognised framework, providing a more comprehensive estimate of private-sector R&D.
- Scope for Higher R&D Investment: Despite the rise in R&D expenditure to 0.83% of GDP, India’s R&D intensity remains significantly lower than:
- China (2.4%), Japan (3.3%), United States (3.5%), South Korea (4.8%), and Israel (5%).
Significance of the Rise in India’s R&D Spending
- Transition to Industry-Led Innovation: Reflects a structural shift towards private sector-led R&D, with industry becoming the largest contributor to India’s research expenditure.
- Strengthened Research & Innovation Ecosystem: Greater participation of businesses and multinational companies is likely to enhance innovation, technology development, and commercialisation of research.
- Improved Global Competitiveness: Higher investment in R&D can strengthen India’s scientific and technological capabilities, supporting high-value manufacturing and a knowledge-based economy.
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