As India's R&D faces funding & talent crunch, Niti panel suggests 50+ fixes

Niti Aayog released two reports titled "Ease of Doing Research & Development in India — Removing Obstacles, Promoting Enablers" and an accompanying survey re...

What Happened

Niti Aayog released two reports titled "Ease of Doing Research & Development in India — Removing Obstacles, Promoting Enablers" and an accompanying survey report in April 2026, based on nine months of consultations with 400+ institutional leaders and 850+ scientists and researchers.
The reports identify India's Gross Expenditure on R&D (GERD) as critically low at 0.64% of GDP, recommending a target of at least 2% of GDP within 4–5 years.
Key bottlenecks flagged include complex multi-portal funding applications, long delays in proposal evaluation and fund disbursement, limited overhead provisions, cumbersome procurement procedures, and restricted international collaboration.
Recommendations include restoring a 5% GST slab for R&D procurement, offering at least 125% income tax deductions for individual contributions to R&D funds, creating an inter-departmental committee within the Ministry of Science and Technology, and establishing State-level Research, Development and Innovation (RDI) clusters.
The report also recommends strengthening CSR provisions under the Companies Act to attract philanthropic support, and creating a Centre for Technology Indigenization to reduce import dependence.

Static Topic Bridges

Gross Expenditure on Research and Development (GERD)

GERD is the total domestic spending on R&D, expressed as a percentage of GDP, encompassing funding from government, business, higher education, and non-profit sectors. It is the primary internationally comparable metric for a nation's research intensity. India's GERD has stagnated between 0.6–0.7% of GDP over the past two decades — compared to China (2.4%), the United States (3.5%), Germany (3.1%), and South Korea (4.8%). The government sector dominates India's GERD at approximately 63% (Central Government 43.7%, State Governments 6.7%, Higher Education 8.8%, Public Sector Industry 4.4%), while the private sector contributes only about 36.4%, the inverse of the pattern seen in innovation-intensive economies.

India's GERD: ~0.64% of GDP (2020–21 figures, as reported by DST)
Among Central Government agencies, DRDO holds the largest share (30.7%), followed by Department of Space (18.4%), ICAR (12.4%), DAE (11.4%), CSIR (8.2%), and DST (6.8%)
Low private sector participation is a structural weakness; in the US, private sector funds ~70% of GERD
Niti Aayog target: 2% of GDP within 4–5 years

Connection to this news: The Niti Aayog report explicitly benchmarks India's 0.64% against global peers to make the case for urgent scaling. Without structural reform to incentivize private investment and reduce bureaucratic friction, the GERD target cannot be achieved through government spending alone.

Anusandhan National Research Foundation (ANRF)

The Anusandhan National Research Foundation Act, 2023 established India's apex body for strategic direction of research, innovation, and entrepreneurship across natural sciences, technology, engineering, agriculture, health, and their interfaces with social sciences. ANRF replaces the Science and Engineering Research Board (SERB), which was set up in 2008. It is governed by a Governing Board of eminent researchers; the Prime Minister serves as its ex-officio President. The Department of Science and Technology (DST) is the nodal administrative department. Total estimated outlay: ₹50,000 crore over five years (2023–28), with 72% expected from the private sector — a significant policy shift toward private-led research funding.

Enacted by Parliament and notified in 2023, aligned with the National Education Policy (NEP) 2020 recommendations
Replaces SERB (est. 2008); broadens mandate beyond science and engineering to include agriculture and health
₹50,000 crore over 5 years (2023–28); private sector expected to provide ~₹36,000 crore
PM as ex-officio President; apex governance above individual ministry silos
Budget 2025–26 allocated ₹20,000 crore to DST for a private-sector-driven R&D fund

Connection to this news: The Niti Aayog report comes in the backdrop of the recently established ANRF framework. Several recommendations — including removing inter-departmental duplication, creating RDI clusters, and streamlining fund release — are operationally relevant to how ANRF rolls out its mandate.

Bureaucratic Barriers in Indian R&D: Procurement and GST Issues

India's General Financial Rules (GFR) and procurement norms were designed for government infrastructure projects and are poorly suited to research environments, where equipment and reagents require rapid, flexible procurement. GST on R&D equipment and consumables (ranging up to 18%) raises input costs for laboratories. The Finance Act 2023 withdrew the 150% weighted deduction for R&D expenditure available under Section 35 of the Income Tax Act (only a 100% deduction currently exists), reducing incentives for private investment. The Niti Aayog report specifically flags these as obstacles to the "ease of doing R&D."

Section 35 of Income Tax Act: covers deductions for scientific R&D expenditure; weighted deduction (150%) removed from FY 2020–21
GFR 2017 governs public procurement; research institutions face L1 (lowest bidder) rules that prioritize cost over quality/specification
Overhead provisions for project grants are typically capped at 10–15%, insufficient for actual institutional costs
Recommendation: restore 5% GST for R&D inputs; 125%+ deduction for donations to R&D funds

Connection to this news: These structural barriers explain why even existing government R&D allocations are underutilized. The report's 50+ fixes are primarily aimed at clearing these process-level obstacles rather than just increasing budgetary outlay.

CSIR and the Architecture of India's Public R&D System

The Council of Scientific and Industrial Research (CSIR), established in 1942, is India's largest publicly funded R&D organization with 37 national laboratories spanning multiple sectors including chemicals, pharmaceuticals, mining, aerospace, and food technology. Alongside CSIR, the Department of Science and Technology (DST, est. 1971) funds extramural research in universities. The Department of Atomic Energy (DAE) and Indian Space Research Organisation (ISRO) operate independent, mission-driven R&D ecosystems. India's Science, Technology and Innovation Policy (STIP 2020) envisioned doubling GERD to 2% of GDP — a target that has not been met.

CSIR contributes ~8.2% of Central Government R&D spending
DST manages key programs: INSPIRE (scholarships), SERB/ANRF grants, Science and Engineering Research Councils
STIP 2020: India's latest overarching S&T policy, targets doubling researchers per million population
India has ~255 researchers per million people vs. ~1,500 in China and ~4,400 in South Korea [Unverified exact figures — based on UNESCO and DST estimates]

Connection to this news: The Niti Aayog report acknowledges that structural reforms are needed across the entire R&D architecture — not just ANRF or CSIR — to build a researcher pipeline and reduce brain drain.

Key Facts & Data

India's GERD: 0.64% of GDP (2020–21); target set at 2% by Niti Aayog
Global comparison: China 2.4%, USA 3.5%, Germany 3.1%, South Korea 4.8%
Private sector share of India's GERD: ~36.4% (vs. ~70% in USA)
ANRF corpus: ₹50,000 crore over 5 years (2023–28); 72% from private sector
Budget 2025–26: ₹20,000 crore allocated to DST for private-sector R&D fund
DRDO accounts for 30.7% of Central Government R&D spending
Niti Aayog consulted 400+ institutional leaders and 850+ scientists over ~9 months
Recommendations include restoring 5% GST slab for R&D procurement and 125%+ tax deduction for R&D donations
Report recommends State-level RDI clusters and a Centre for Technology Indigenization