India’s R&D Policy Debacle - Playing Catch-Up

In January 2003 the Government of India announced a new science policy that was aimed directly towards R&D and the IT Sector. The government after years of inaction finally created policy measures that were meant to increase R&D activity in the private sector.

Until this time most of the R&D spending was directly propagated through the state run and federally run research labs. The government has had considerable success with agriculture spending in the last 4 decades, India has seen record surpluses and been self contained in terms of produce versus consumption since 1967. At the moment India has the highest spending on agriculture amongst any other Asian country. Why are the Policy makers in India investing so heavily on agriculture and not on R&D or infrastructure? Is there some form of analyses that highlights this inequity in spending and are there any outputs from research monitoring and evaluation that will justify this inequity? The policy makers that are at the helm must make an effort in providing this information to the public in the form of reports and publications so people can judge what the outcomes of their tax payments are. Studies have ranked government expenditures by impact and their level of effectiveness and the results (for India) are quite interesting1. Studies that
used benchmarks such as Gross Value Additions (GVA) as a measure of how sectors in which the government was placing a large emphasis are performing have been ongoing and 2 have shown promise in defining measurable outputs that result from government spending in certain areas.

Now, lets turn our attention to the new Science Policy the government plans to increase R&D spending to about 2% of the GDP by the year 2004. Currently India has a very large educational and research base with about 400 state-run laboratories, 230 universities and 1,300 research and development units in industry; the system churns out close to 165,000 fresh graduates that work in the IT and related industries (NASSCOM- 2004).

Can this figure be an adequate measure to see the relevance of further IT spending within R&D or should the government address the evaluation of this spending by looking at various variables like patents being generated by the industry (approx. 350 last year), industry spending in the same category, new products being introduced etc. The policy makers have created new programs within the science policy initiative that hints at an agency that will be responsible for the evaluation and monitoring of the funding provided by the government but we have not seen any particular progress in that regard. Why are the policy makers not waking up to this critical aspect? If we look around us globally it is clear that most of our neighbours in the East are increasing R&D spending and have created measures that increase participation in research from the industry they generate more patents (Taiwan 10 times more, Malaysia: 8 times more than us), have had a higher rate of return for each government dollar spent. It seems that given our advantage in terms of a large educational base we are not capitalizing against our neighbours? Why is this? At this point the government needs to define its evaluation mechanisms and be worried about the long term outcomes that the proposed research spending will generate. As an example a simplistic model could be a quantitative assessment of the outputs of the spending that the government proposes with respect to actual returns in terms of poverty alleviation which will not only make this process more transparent but will also instil some form of faith in the system in the common man. The policy makers in Delhi will need to address concerns in the industry by creating mechanisms that provide a holistic
approach to Science & Technology Policy if they want industry to participate actively in research.

Having tried previously to give the Indian people socialism they only created Statism, now, after having slowly and agonizingly (since 1991) opened their economy, Policy makers are trying to play catch-up with the rest of the world.

Lets hope they have a good pair of sneakers and their best thinking caps on!

1 Linkages between government spending, growth and poverty in Rural India: Fan, Hazel, Thorat http://www.ifpri.org/pubs/abstract/abstr110.htm
2 Indias Technology Priorities: Chandra, Chandrasekar
http://www.stratmag.com/issue2Dec-1/page03.htm