Prime Minister Launches Rs 1 Lakh Crore R&D Fund to Boost Private Sector Innovation

Prime Minister Narendra Modi has inaugurated a significant Rs 1-lakh-crore RDI (Research, Development, and Innovation) Fund, aiming to energize private sector investment in research and development and accelerate India's journey towards becoming a developed nation by 2047 (Viksit Bharat 2047). The fund was launched at the first Emerging Science, Technology and Innovation Conclave.

The RDI Fund will operate on a two-tiered structure, managed by the Department of Science and Technology. The Rs 1-lakh-crore corpus will be housed within the Anusandhan National Research Foundation. Instead of direct investment, the fund will channel capital to second-level fund managers, such as Alternative Investment Funds (AIFs), Development Finance Institutions (DFIs), and Non-Banking Finance Companies (NBFCs). These managers, supported by investment committees of financial, business, and technical experts, will then invest in industries and startups.

This substantial fund is crucial as India's Gross Expenditure on R&D (GERD) as a percentage of GDP hovers around 0.6-0.7 percent, significantly lower than global averages and major economies like the US and China, which spend over 2.4% and 3.4% of their GDP respectively. A key challenge highlighted is the muted investment from India's private sector, contributing only about 36 percent to GERD, compared to over 70 percent in advanced nations. Experts cite R&D's high-risk, long-gestation nature, industry preference for importing technology, and structural issues like weak academic-industry links as reasons for this reluctance.

Impact: This initiative is expected to significantly boost innovation and technological advancement within India, potentially leading to the creation of new industries, enhanced manufacturing competitiveness, and stronger economic growth. It aims to shift the mindset towards viewing R&D as a growth catalyst. Rating: 8/10

Difficult Terms: * RDI Fund: Research, Development, and Innovation Fund, a new government initiative to boost R&D spending. * Viksit Bharat 2047: India's vision to become a developed nation by the year 2047. * Anusandhan National Research Foundation (ANRF): An organization to coordinate and promote scientific research in India, housing the RDI Fund corpus. * Gross Expenditure on R&D (GERD): Total national spending on research and development activities. * GDP (Gross Domestic Product): The total value of goods and services produced in a country. * Alternative Investment Funds (AIFs): Pooled investment vehicles for accredited investors, investing in various assets outside traditional markets. * Development Finance Institutions (DFIs): Institutions providing funding for development projects, especially in emerging economies. * Non-Banking Finance Companies (NBFCs): Financial firms offering services like loans but without a banking license. * Intellectual Property Protection: Legal rights protecting creators' innovations from unauthorized use.