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In a significant initiative to incentivise research and development in the private sector, Finance Minister Nirmala Sitharaman on Thursday announced the establishment of a financial corpus of Rs 1 lakh crore that will provide low-cost or zero-interest loans for research and innovation.
In the interim Budget for this year, Sitharaman said private companies could avail of interest-free loans for up to 50 years through this new mechanism.
“For our tech-savvy youth, this will be a golden era. A corpus of Rs 1 lakh crore will be established with 50 year interest-free loan facility. The corpus will provide long-term financing or refinancing with long tenures and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” Sitharaman said.
The new fund is in sync with the government efforts to encourage private sector involvement in research activities. Last year, it had set up a National Research Foundation (NRF) whose main objective is to significantly improve, both in qualitative and quantitative terms, the country’s research output. The NRF earmarks a spending of Rs 50,000 crore on research activities over the next five years. More than 70 per cent of this money is envisaged to come from the private sector.
Principal Scientific Advisor to the government Ajay Sood said the new budgetary provision would enable greater private sector spending on research and development, and help in creating the right environment for innovation.
“There is no explicit linkage between this corpus (announced in the budget) and the NRF, but it will obviously help the objectives of the NRF. The larger point is that the government seems committed to ensure greater and easier availability of money for research purposes, and that is very welcome. Lack of adequate funds has always been one of the major hurdles in the improvement of research output from India. The new corpus is a very significant step forward towards addressing this,” Sood told The Indian Express.
The government has been working to expand the research base, and get the universities and private sector involved in research and innovation, particularly in transformative technologies. The corpus of Rs 1 lakh crore is one way of addressing the longstanding complaint of the lack of money for scientific projects.
“This will empower the private sector, especially young entrepreneurs, and create enabling atmosphere for research,” he said.
Sood said another announcement made by Sitharaman in the Budget speech, the one related to promoting deep-tech technologies in defence sector, was also very important. In her speech, Sitharaman said the government would soon launch a new scheme for strengthening deep-tech technologies for defence purposes and expanding “atmanirbharta” or self-reliance.
Deep tech refers to advanced and disruptive technologies, mainly in the fields of nanotechnology, biotechnology, artificial intelligence, quantum technologies, cyber security, semiconductors, data science, and the like, that are still being developed and have the potential to bring transformative changes.
The government is in the process of finalising a comprehensive national policy on deep-tech start-ups, confined not just to defence but across all sectors. The policy is aimed at addressing challenges being faced by start-ups working in these areas, and create the right conditions for improved outputs.
