Once again, we hear the promise of boosting the money India spends on research and development (R&D) from the current level of less than one per cent of its GDP to two per cent. Most recently, this found expression in Prime Minister Manmohan Singh's inaugural address at the Indian Science Congress in Bhubaneswar. It bears recall that the Science and Technology Policy of 2003, unveiled by Prime Minister Atal Behari Vajpayee, at that year's Science Congress, declared that the country's investment in s&t would be raised to at least two per cent of GDP by the end of the Tenth Plan (2002-07). In January 2007, Dr. Singh, inaugurating the Science Congress held at Chidambaram in Tamil Nadu, pushed the timeline for achieving that goal to “the next five years.” Now that those five years are up, the Prime Minister has extended the target date by another five years, with the goal to be met “by the end of the 12th Plan Period.” And so it goes on. India's R&D expenditure has risen from close to Rs.16,200 crore in 2000-01 to nearly Rs.37,800 crore seven years later, according to statistics published by Union Government's Department of Science and Technology. But in the face of a rapidly growing economy, such spending has remained at no more than 0.9 per cent of the GDP. China has clearly done much better, with its research outlay rising from 0.9 per cent of GDP in 2000 to 1.4 per cent by 2006 and reportedly making further progress after that.

The bulk of India's research funding continues to flow from the government. However, such funding as a proportion of the country's total R&D expenditure has fallen from over 80 per cent in 1990-91 to 66 per cent in 2007-08. Over the same period, research investments by business enterprises have risen from about 14 per cent to around 30 per cent. The pharmaceutical and automotive industries, in particular, have invested heavily. Besides, large multinationals and other foreign companies have been creating research facilities in India. According to one analyst, Reserve Bank of India data indicate that inflows of foreign exchange for R&D services have increased from $221 million in 2004-05 to $878 million in 2010-11. India's long-term competitiveness, however, rests on making sure that domestic industry does not lose out in the process. While the Prime Minister has called on industry to invest more in research, the government also needs to recognise its role in fostering indigenous capabilities. That requires making sure that the various arms of the government work together rather than at cross-purposes. This is something China appears to have mastered.

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