4 min readAug 20, 2026 12:29 PM IST
First published on: Aug 20, 2026 at 06:20 AM IST
Not all proximity is conflicting, especially if it improves informed decision-making. By overstating the investee “connections” of the Research Development and Innovation Fund (RDIF) investment committee members, the editorial (‘Trust is key, tech fund needs more guardrails’, IE August 10) understates the informational asymmetry bridged by the presence of technology leaders in the committee. In our opinion, deep-tech investment is a domain where expert judgement requires proximity that enables a combined knowledge of technological maturity and commercial viability, something neither government officials nor academic and scientific evaluators alone can bring to the table. In fact, these “conflicted” industry veterans may be RDIF’s best assets.
If we look closely, the scheme’s design warrants the Expert Advisory Committee to be composed of “eminent industry leaders drawn from industry, investment and/or technology R&D sectors”. In our opinion, these connections should be treated as crucial inputs for bridging the information gap in the screening process as the members are industry veterans who have built and deeply engaged with India’s technology ecosystem. While parliamentary and media scrutiny are essential for political accountability in a democracy, it should not inadvertently stifle a scheme whose effective implementation is essential for India’s growth prospects.
RDIF is not a public expenditure scheme, rather a public capital deployment mechanism where funds are deployed as low-interest loans, equity or fund-of-funds contributions. Provisions in the RDI Special Financial Rules address recycling of capital and its return to the Consolidated Fund of India, making it a revolving innovation fund rather than a one-time government expenditure. The portfolio approach and choice of companies whose technology risk is overcome are strategic decisions that reduce government risk.
For a government scheme of its scale, RDIF was operationalised in record time. By bringing in private-sector investment expertise, it aims to address real problems identified in the government’s financing of high technology firms such as cumbersome processes and gaps in technical knowledge that affect bureaucratic decision-making. The 50 per cent RDIF limit to project financing ensures project proponents and private investors have shared accountability.
As RDIF’s institutional design is fundamentally different from conventional public expenditure schemes, judging it through the lens of procedural propriety governing conventional bureaucratic decision-making may not be prudent. Instead, it should be assessed based on outcomes and the effectiveness of its governance architecture in tackling conflict of interest. The proof of the pudding is in its eating. Out of the 15 start-ups publicly mentioned, at least 10 have clear institutional or founder linkages to publicly funded premier technological institutions like IITs, and most have received prior external funding, signalling their technical merit.
A decade into Startup India, start-up registrations have burgeoned and India’s entrepreneurial ecosystem has come a long way. Nevertheless, India is yet to produce many high-impact global scale-ups, particularly in technology-intensive sectors. The RDIF is targeted to address this gap in frontier sectors. The government’s sectoral commitments function as a catalyst for private investment in technology sectors where the government has specific mission-mode initiatives.
TDB’s Investment Committee is a recommending body with the final accountability resting with the TDB. The chairperson and members of the investment committee are industry experts with impeccable credentials. Foreseeing the eventuality of unavoidable connections between industry experts and potential applicants, pre-investment guidelines to tackle conflict of interest, including mandatory recusal and “supermajority” rules for choice of investee companies, are in place.
RDIF signifies a shift from the traditional public-funded R&D grant model to one where the government shapes the strategic direction of technological progress and mobilises industry expertise and private capital. Given its importance to India’s technological sovereignty and strategic autonomy, it must not be undermined by political controversy.
The writers are with the ICRIER-Prosus Centre
The Research, Development and Innovation (RDI) Fund, with a corpus of Rs 1 lakh crore, was created by the government last year. (Iamge source: X/@PIB_India) 
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