Allocation of Government Research Funds: How Effective is it?

There are opinions that the share for government R&D funding is a very small fraction of the overall GDP is relatively small, i.e. 0.6%. Increased innovation funding is expected to increase innovation, prestige, and economic activity. However, there is not much discussion questioning the effectiveness of the dedicated funding. 

India has seen advancement in science and technology during recent times, thanks to the government for all its funding and support. The government has provided direct policy support leading to many drastic changes in the way education, health, and infrastructure work.

However, the potential for innovations is much higher than the current scenario. Out of the 47,857 patents claimed in the financial year 2017-2018, the number of technologies capable of introducing breakthrough is very low.

Has Government Funding Helped the Economy?

The government’s funding has not been yielding a lot of new technological innovations. Most of the startups have not registered under government-funded research. There is no evidence to show a correlation between economic growth and research funding hikes.

Though there is an increase in the problem-solving capability in India during the recent past, executing life-changing innovations require a lot of manpower with special skills. Education and training require equal focus and funding as R&D. 

There are many indirect factors that limit the country’s growth such as poor education, health, and infrastructure. Weak protection of intellectual property rights discourages citizens from risk-taking.

Also Read: How GDP Growth Could Be Recovered with Sectoral Solutions

In addition, the distribution of research funds is not satisfactory. Currently, research allocations are only focused on applied research and technologies. It is assumed that such an allocation can lead to quick commercialisation and success of the technology. However, the government must consider that the allocation of government research funds can only make technology successful.

Ensuring Better Outcomes in the Future

To ensure better outcomes from the government research funding, the government must focus on funding basic research. Basic research is the key to innovating technology; however, one needs to wait for a long gestation period for new technology to take shape from a research. India is mostly looking for cost-effective innovations that bring pride and identity to India. 

Further, researchers expect the government to focus more on facilitation than just funding. As a next-level of assurance, the government must strengthen intellectual property rights; enhance the reach of education, health, and infrastructure; entrepreneurship skills of the people must be polished and incentivised. The private sector must be encouraged to invest more in research and to take risks.

The area of research and its funding must be brought into daylight; the allocation and its effectiveness must be publicly debated so that it creates awareness in more people. Such a debate must be data- and result-driven so that public funds do not get misused.

For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in