Rs 20,000 Crore Allocated to DST to Launch Rs 1 Lakh Crore Research and Development Fund

Union Finance Minister Nirmala Sitharaman has earmarked Rs 20,000 crore for the Department of Science and Technology. This fund aims to encourage private sector innovation in research and development. The initiative follows a previous announcement of a Rs 1 lakh crore fund for R&D in the budget last July. This allocation is intended to boost research in deep tech and emerging sectors.

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The Union Budget for 2025-26 also includes plans to explore a Deep Tech Fund of Funds. This initiative seeks to stimulate next-generation start-ups. Abhay Karandikar, Secretary in the Department of Science and Technology, stated that this move will help achieve strategic autonomy in key technology areas. Despite tax incentives, private sector R&D investment has been lacking.

Private Sector Involvement

The government has intervened to encourage private sector participation in R&D. The Economic Survey presented on Friday highlighted the private sector's reluctance to invest in this area. Chief Economic Advisor V Anantha Nageswaran noted that despite numerous government incentives, private sector spending on R&D remains low.

Nageswaran pointed out that the government contributes half of the country's total R&D expenditure. In contrast, business enterprises account for only 41%. He emphasised the need for the private sector to enhance its investment in R&D, particularly in specific sectors.

Increased Budgetary Allocations

The Department of Science and Technology's budget has significantly increased from Rs 8,029 crore to Rs 28,508.90 crore. The Department of Biotechnology received Rs 3,446.64 crore, up by Rs 1,170.94 crore from the previous allocation of Rs 2,275.70 crore in July's budget.

The Department of Scientific and Industrial Research saw an increase to Rs 6,657.78 crore from Rs 6,323.41 crore in the 2024-25 fiscal year. Meanwhile, the Department of Atomic Energy was allocated Rs 24,049.10 crore compared to Rs 24,968.98 crore previously.

Space Sector Funding

The Department of Space received an allocation of Rs 13,416.2 crore, up from Rs 13,042.75 crore. The Indian Space Research Organisation (ISRO) centres were allocated Rs 10,230.2 crore for various projects including launch vehicle development.

Additionally, space applications received Rs 1,706.8 crore for centres like the Space Applications Centre and the National Remote Sensing Centre. This funding supports both development and educational communication initiatives within these centres.

The government's commitment to boosting R&D through increased funding aims to address private sector hesitancy and foster innovation across various scientific fields.