Budget Gives Big Science Allocations, but Core Funding Gaps Remain

A ₹1 Lakh Crore Ambition, But Who Will Pay for It?

The 2026 Union Budget announced a bold ₹1 lakh crore Research, Development and Innovation (RDI) scheme to energise India’s science ecosystem. Yet, history tempers optimism. Just two years ago, the Department of Science and Technology's budget allocation of ₹7,931.05 crore plunged to actual spending of ₹4,002.67 crore—a staggering 50% shortfall. The rhetoric outpaces fiscal reliability, leaving little room for confidence in this new promise.

India’s long-standing failure to breach the 0.7% GDP barrier for research and development (R&D) investment is internationally embarrassing. Compare this to South Korea, where the figure exceeds 4.5% of GDP. Here, over 70% of R&D financing comes from private industries. In contrast, India leans heavily on underfunded public resources, with the private sector contributing just 36% of total R&D spending. An ambitious budget announcement cannot mask this structural gap.

The Institutional Backbone: Bright Plans, Weak Delivery

The new allocations come against the backdrop of high-profile initiatives like the India Semiconductor Mission (2021), the National Quantum Mission (₹6,003.65 crore for 2023–31), and the BioE3 Policy (2024). These programs aim to create robust ecosystems in critical areas such as semiconductors, quantum computing, and biomanufacturing hubs. Additionally, the IndiaAI Mission boasts an expanded network of 38,000 GPUs dedicated to startups and researchers. The question, however, is not whether these plans are ambitious, but whether they are operationally viable.

Key implementing agencies such as the Department of Science and Technology (DST) and Department of Biotechnology (DBT) have struggled with fund utilisation in recent years. The DBT’s 2023–24 revised allocation was slashed from ₹2,683.86 crore to ₹1,607.32 crore; even this reduced amount was underutilised, with actual spending capped at ₹1,467.34 crore. Expanding the circle of institutional actors to include outliers like the Anusandhan National Research Foundation (ANRF), tasked with mobilising ₹50,000 crore by 2028, only adds more moving parts to an already overstretched machinery.

Funding Ambitions Meet Fiscal Unreality

On paper, the RDI scheme is a giant leap forward. By offering low-interest loans and equity investments to the private sector, it seeks to address India’s retail-heavy R&D mechanisms, where government currently foots 43.7% of the bill. The backdrop here is critical: India’s private sector exhibits a chronic underinvestment in innovation compared to its global peers. While countries like the US leverage public-private partnerships to commercialise university research through tax incentives and long-term grants, Indian industries remain risk-averse, unwilling to invest heavily in high-stakes innovation.

Yet, questions abound on the modalities of such a massive funding scheme. How will the ₹1 lakh crore corpus actually materialise? The finance minister has provided little detail on mechanisms, timelines, or even enforcement levers to ensure timely utilisation. Without clarity, this may turn into yet another headline-grabbing allocation with no substantive impact.

Structural Contradictions: Federalism, Bureaucracy, and Mistrust

India’s GERD stagnation is not merely a budgetary issue—it is a systemic problem of fractured accountability across ministries, over-centralisation, and weak Centre-state alignment. While high-profile R&D hubs are announced at the Central level, implementation often sputters at state-level institutions, many of which lack both financial autonomy and technical capacity. The National Quantum Mission’s ₹6,003.65 crore over eight years, for instance, faces state-level disconnects in technical expertise, potentially jeopardising ambitious quantum technology targets.

Inter-ministerial coordination is another chink in the armour. The semiconductor push, touted as a pillar of India’s long-term technology sovereignty, needs alignment between the Ministry of Electronics and Information Technology, the Ministry of Defence, and the Ministry of Skill Development. Evidence from ISRO’s struggles to integrate private companies post-2020 space reforms demonstrates how such friction routinely delays outcomes.

Lessons from South Korea’s R&D Success

India’s struggles with private sector R&D contributions stand in stark contrast to South Korea, where industrial giants like Samsung and LG anchor the research ecosystem. The Korean government has long incentivised innovation through predictable public investments and robust intellectual property protections. Equally significant is its reliance on universities as cornerstone institutions, tied closely to both state and private R&D agendas.

Additionally, South Korea’s innovative “sandboxes” allow experimental technologies to bypass bureaucratic constraints for faster market entry. India must emulate such models to overcome its own regulatory inertia. The absence of similarly adaptive frameworks in India’s RDI scheme is a glaring omission.

A Roadmap for Transparency and Realism

Success won’t be measured in allocations alone—it will depend on sustained funding flows, inter-ministerial synergy, and transparent institutional governance. Priority must shift to correcting execution gaps rather than doubling down on hyperbolic commitments. Metrics such as fund utilisation rates, private sector investment ratios, and patent filings will be critical data points in evaluating progress.

A recalibration of government priorities is also necessary. Programs like the ANRF and RDI scheme must integrate outcome-based benchmarks to ensure accountability. A robust framework for independent audits could provide a measure of transparency glaringly absent from current plans.

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