Private R&D spends cross govt.’s in FY24

India’s R&D Spending Crosses 0.8% of GDP; Private Sector Becomes Largest Contributor

GS-III: Science & Technology | Research & Development | Innovation

Context

Higher R&D spending: India’s Research and Development (R&D) expenditure increased to 0.83% of GDP in 2021-22, crossing the 0.8% mark for the first time since 2009-10.

Structural shift: Private industry accounted for 45.5% of national R&D expenditure in 2021-22, increasing to 51.8% in 2023-24, the first time businesses contributed more than all levels of government combined.

Latest disclosure: The figures were released by the Department of Science and Technology (DST) in reply to a Lok Sabha question and form part of the Research & Development Statistics 2025-26.

India’s R&D Expenditure

Share in GDP: India’s R&D expenditure rose to 0.83% of GDP in 2021-22, after declining to 0.64% in 2020-21.

Gross Expenditure on Research and Development (GERD):

• ₹1.33 lakh crore (2019-20)
• ₹1.27 lakh crore (2020-21)
• ₹1.95 lakh crore (2021-22)
• ₹2.13 lakh crore (2022-23)
• ₹2.45 lakh crore (2023-24)

Private Sector Contribution

Share in GERD:

• 38.5% (2017-18)
• 37.7% (2018-19)
• 33.8% (2019-20)
• 36.4% (2020-21)
• 45.5% (2021-22)
• 48.0% (2022-23)
• 51.8% (2023-24)

First milestone: For the first time, private industry contributed more than half of India’s total R&D expenditure.

Industry spending:

• ₹43,800 crore (2017-18)
• ₹46,700 crore (2018-19)
• ₹44,800 crore (2019-20)
• ₹46,400 crore (2020-21)
• ₹88,600 crore (2021-22)
• ₹1,26,800 crore (2023-24)

International Comparison (2020-21)

• China: 2.4% of GDP.
• Japan: 3.3%.
• South Korea: 4.8%.
• United States: 3.5%.
• Israel: Around 5%.

DST’s R&D Statistics

Compiling agency: The Department of Science and Technology (DST) compiles India’s official R&D statistics through the National Science and Technology Management Information System (NSTMIS).

Survey base: National science surveys have been conducted since 1973 using UNESCO and OECD definitions.

Coverage: The surveys collect expenditure data from:

• Central Government agencies.
• State Government agencies.
• Universities.
• Public Sector Enterprises.
• Private industry.

Expanded coverage: The 2022-23 edition included:

• Multinational companies.
• Enterprises outside the Department of Scientific and Industrial Research (DSIR) recognition scheme.

DSIR centres: There were 2,397 DSIR-recognised in-house R&D centres as of December 2022.

Observations

Recovery after COVID-19: GERD increased sharply after the decline recorded during 2020-21.

Government spending: Budget documents do not indicate a proportionate increase in government science expenditure during the same period.

Major driver: The increase in GERD coincided with a significant rise in private sector investment in research and development.

Way Forward

• Sustain private participation: Continue encouraging greater industry participation in research and development.
• Strengthen data coverage: Regular publication of comprehensive R&D statistics can improve evidence-based policymaking.
• Broaden research ecosystem: Expand participation of institutions and enterprises covered under national R&D surveys.
• Maintain investment momentum: Build on the recent increase in GERD to strengthen India’s innovation ecosystem.

Conclusion

Key trend: The latest data indicate both a rise in India’s overall R&D expenditure and a significant shift towards greater private sector participation in research and innovation.

UPSC Mains Practice Question

Q. India’s research and development ecosystem is witnessing a structural shift with increasing private sector participation. Discuss in the light of the latest R&D expenditure data released by the Department of Science and Technology.