R&D Expenditure Ecosystem: Report and actions taken

The R&D Expenditure Ecosystem: Current Status and Way forward report published in July 2019 brought afore recommendations under seven categories namely: ‘Institutional, Policy, Regulatory, Promotional, Monitoring & Evaluation, Data & Indicators and Tax Incentives with an empowered Office of Principal Scientific Adviser’. This document had five objectives:

1. To examine the relevance of R&D in the context of economic growth and social wellbeing. 
2. To assess the level of R&D spend in India as compared to the global  spend.
3. To identify the major stakeholders in India’s R&D ecosystem and assess their relative contributions to total R&D spend. 
4. To examine the strength and weakness of the existing ecosystem in fostering R&D 
5. To prepare a roadmap for a smart efficient and effective R&D expenditure ecosystem by recommending suitable measures for reaching the desired level of R&D spend by 2022.

Outcomes of the report:

1.  Notification of Ministry of Finance for introducing a new appendix in the Budget Circular 2021-22

Until 2021 Union Budget neither collected nor collated R&D Expenditure/Allocation data. This has now changed with Union Budget      2021-22. At the initiative of O/o PSA, Union Budget Circular 2021-22 introduced an Appendix LV in order to capture the R&D  Expenditure/Allocation by Central Government department wise.  

2.  Revision of guidelines for according suitable weightage to R&D by Department of Public Enterprises,

Central Public Sector Enterprises (CPSEs) play a key role in the R&D ecosystem. As per the latest Public Enterprise Survey report, CPSEs have incurred 4038 INR Crores of expenditure towards R&D. In order to further strengthen their role, O/o PSA took an initiative to have the MoU guidelines for CPSEs revised for assigning suitable weightage to R&D with Department of Public Enterprises (DPE). DPE has now issued revised MoU guidelines with effect from Fiscal year 2021-22 to all Ministries for compliance.

3.  Introduction of a chapter on Research and Innovation in the Economic Survey 2020-21, A chapter titled “Innovation: Trending Up but needs thrust, especially from the Private Sector” was included in the Economic Survey 2020-21 document in response to an initiative by O/o PSA.

4.  Amended rules for CSR Funding in R&D.

Efforts underway:

1.  O/o PSA is working to introduce a separate chapter on R&D Exports in the forthcoming Foreign Trade Policy with Department of Commerce in order to give due importance to this sunrise sector.

2. States incur expenditure towards R&D. Major items of expenditure include medical, agriculture and science, technology and ecology.  This was revealed in a study report of RBI on the request of O/o PSA. To integrate R&D ecosystem into state economy, O/o PSA has requested State Governments to introduce a separate R&D Budget in their respective State Budgets. Nodal Officers have been nominated and the exercise of integrating the R&D Budget into General Budget is under progress.