India's science and technology funding: Time for a rethink?

Rakesh Kumar*

doi:10.1038/nindia.2019.83 Published online 30 June 2019

Rakesh Kumar
The oft-heard argument about India’s funding for science and technology research goes like this: government R&D funding as a fraction of overall GDP is relatively small (0.6% for India vs 2.1% for China and 2.8% for the US); increasing research funding will lead to increased innovation, prestige and economic activity as well as enhanced problem-solving capacity.  

We must, however, ask the question of whether government funding has delivered the claimed benefits? India has made  advances in science and technology due to government support for education, health, and infrastructure, as well as direct policy support for promotion of science and technology. However, the direct macro-deliverables from government research funding have been much less clear. For example, the number of papers and patents has increased from 46,904 in the financial year 2016 to 47,857 patents in FY18. However very few modern technological breakthroughs can be claimed.

Is government research funding boosting the economy?

Industrial impact has been minimal, with only a handful of products resulting from direct government R&D funding. While startups have mushroomed, not many of them have origins in government-funded research. It is also unclear if increased government research funding has spurred economic activity – there is no correlation between economic growth rate and research funding hikes. The nation’s problem-solving capacity has obviously increased over time – India is executing sophisticated science and technology projects – however, requisite skills may be attributable more to education and training than research. Moreover, a large fraction of these technologies, with notable exceptions (especially in space sciences), are imported – even the engine of the ‘indigenous’ Tejas fighter jet is imported.

Several factors point to this. Firstly, a 2003 study which showed that publicly funded research had no impact on economic activity for any OECD country – all economy-stimulating innovation arose from private investment. Even if you accept the view that the benefits from public funding of research are higher, India still has only a few economy-stimulating technology breakthroughs from government-funded research.

Second, compared to developed countries, indirect factors limit growth. Poor education, health, and infrastructure prevents broader engagement in research and development, while weak protection of intellectual property rights discourages risk-taking, and nascent innovation ecosystems are not yet able to train, mentor, and support researchers and innovators at scale. 

Another factor may be an ineffective allocation of research funds. As in many countries, research allocation in India has been increasingly focused on applied research and technologies. The underlying assumption is that such funding will lead to faster and more successful commercialization of new technologies, which, in turn, can benefit the nation. However, little evidence suggests that allocation of government research funds affects whether a new technology will be successful. As such, any investment directly into an emerging technology in order to drive it to the marketplace, or adoption, may be ineffective.

Ensuring better outcomes is key

To justify increased future government funding of research, better outcomes must be ensured. The following factors should be considered.  

First, government should primarily focus on funding basic research and/or moonshots. It is widely believed that basic research leads to innovative technologies, however the gestation period for a new technology to be borne out of basic research is long. Since industry may not find such research investment attractive, government funding may be critical to sustaining such research. Similarly, moonshots (for example, LIGO, Gaganyaan or quantum computing), at a minimum, enhance national identity and pride. For a diverse country like India, any cost-effective and peaceful instrument that enhances identity and pride is valuable. In addition, moonshots also often lead to development of intermediate technologies that can have applications in other settings.

Government should primarily focus on funding basic research and/or moonshots.

© S. Priyadarshini

Second, when funding applied research, the government should specify research outcomes (for example, secure and decentralized databases), not approaches (for example, blockchain). This prevents crowding out of technologies that may address the same problem and allows market forces to determine victors, especially if potential users guide the allocation of research funds. Market-driven technology development aids in commercialization of developed technologies, leading to better outcomes for the research funding. It also helps avoid expensive mistakes - one cautionary tale is the US government spending billions of dollars in the energy sector on technologies that went nowhere: hydrogen-powered vehicles, ‘clean’ coal, or synthetic fuels, for example.  

Third, focus should shift more to facilitation than funding. For example, intellectual property rights need to be strengthened; education, health, and infrastructure metrics need to be improved; and entrepreneurship needs to be taught and incentivized. The private sector needs to be encouraged to take risks and increase research investment. Only 35% of the overall research investment in India is private as compared to 87% in China and 68% in the US.

In today’s world, the winner takes all, both in terms of economic and strategic advantage. Therefore the fourth goal should focus on achieving technological parity or superiority in chosen areas. Considering the increasing costs for developing new science and technology, focused and sustained investment, akin to the US DARPA programme or China’s 863 programme, should be made in a limited number of areas. Since building strength from the ground up is difficult, time-consuming and expensive, India should focus on areas with existing strengths or built-in advantages such as commercial space aviation or data driven technologies and IT systems.  

Finally, careful and periodic evaluation needs to be performed to measure outcomes. This encourages accountability and adaptation both for funders and performers. Funding without evaluation of outcomes is a luxury that a developing country such as India cannot afford.

In summary, government-funded research has had a mixed record, both in India and internationally, especially in terms of stimulating innovation and economy per rupee/dollar invested, particularly when compared against private investment. However, national pride, occasional commercialization, enhancement of national problem-solving capacity, and the promise of economic payoff may be good enough reasons for continued funding.

We must make sure that debate about the right level and nature of funding continues to be data-driven and return-oriented so that hard-earned public money is used effectively.

[*Rakesh Kumar is an Associate Professor in the Electrical and Computer Engineering Department at the University of Illinois at Urbana Champaign. He can be contacted at .]