Union Budget 2024-25: Centre announces Rs 1 lakh crore in interest-free loans for private sector research

India’s interim Union budget for 2024-25 has earmarked Rs 1 lakh crore to amplify research and innovation among the country’s youth by providing “long-term financing or refinancing with extended tenors and low or nil interest rates”. Nirmala Sitharaman, in her budget speech, declared that this initiative is designed to prompt a substantial scaling up of research and innovation in sunrise domains (new sectors), encouraging collaboration between the nation’s youth and technology.

Experts, though, say that instead of boosting funding for private research, which is largely profit driven, the Centre should have focused on funding research in public universities and agencies. “They are not providing enough public funding for research in universities. Yet, the government plans to inject money into the private sector,” said C P Rajendran, adjunct professor at the National Institute of Advanced Studies, Bengaluru. “The number of universities has gone up, but the budget has not kept up,” he added. Sitharaman, in her speech, said that the Centre, in recent years, has set up seven new branches of Indian Institute of Technology (IIT), 16 of Indian Institute of Information Technology (IIT), seven of Indian Institute of Management (IIM), 15 new All India Institute of Medical Sciences institutions (AIIMS) and 390 universities.

“Budget allocation for basic research has been going down. The number of research fellowships has been curtailed. Still, no announcement was made for boosting funding for research in universities and research institutions,” said Dhrubajyoti Mukherjee, president of Kolkata-based non-profit Breakthrough Science Society. “It looks like they are more interested in innovation in corporate companies. It reflects on the outlook of the government,” he added.

Rajendran said the announcement might be to incentivise the private sector to enter public research, citing the government’s plan to involve the private sector in funding the National Research Foundation (NRF). Of the Rs 50,000 crore set aside for NRF between 2023 and 2028, Rs 36,000 crore is expected to come from the private sector. “In the long run, the government wants to step back from funding research and expects the private sector to take the lead,” he added.

Rajendran and Mukherjee both expressed apprehensions that the private sector might prioritise translational research over basic research, potentially undermining scientific exploration.

Meanwhile, Swapnil Shrivastav, co-founder at Uravu Labs, a Bengaluru-based deep-tech startup, lauded the corpus as a significant boost for sunrise projects, especially in the climate-tech and deep-tech sectors. He, though, said that the corpus should be directed towards emerging industries like hydrogen, semiconductors, water, battery technologies, advanced materials, and biotech, rather than conventional projects already funded by existing financial instruments.

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