NATIONAL RESEARCH FOUNDATION (NRF) BILL, 2023

Why in the news

• Among the most important pieces of legislation slated to be tabled in the current monsoon session of Parliament is the National Research Foundation (NRF) Bill, 2023.

Key aspects of the Bill

• The bill envisages to create a new centralised body to fund research in the country.
• The centralised body will have a budget of RS. 50,000 crore for a duration of 5 years.
• Out of this, majority of the fund amounting to Rs. 36,000 crore would be sourced from the private sector.
• The National Research Foundation (NRF) is modelled upon the US’s National Science Foundation and European Research Council.
• NRF main objective is to attract investment into the research framework from the private sector companies.

Issues in India’s Research Infrastructure

• India’s spending on research has lagged between 0.6%¬0.8% of GDP. The budgetary allocation to research has not been up to the mark, when compared to other nations going through the same stages of development.
• When compared to countries like China, the U.S. and Israel, where the private sector contributed nearly 70% of the research expenditure, India total research expenditure through the private sector is only around 36%.
• India’s private sector has only been a passive entity when it comes to investment in research. Majority of the research has been funded by the government led initiatives.
• The reason for other countries private sector investing in research is the sustained government efforts to support indigenous universities and research institutes. They then encourage individuals to build companies which see value in investing in research and development. In India today, the number of such companies is limited to a very few small numbers.
• The funds spent by companies on CSR are mostly limited to their respective areas. The government also does not get enough say in the utilization or deployment of these resources.

Way Forward

• There is a need to galvanize investments from the private sector as the government alone cannot manage such high levels of investments. Further, when the expected results from such investments will take years to materialize.
• For this to happen, new innovative approaches are needed to be adopted. One such approach could be to ask the companies, who allocate specific funds for the ‘Corporate Social Responsibility’ (CSR) towards the research sector. Where currently, almost 70% of the CSR funds are allocated towards the education, healthcare and sanitation.
• The government can try to offer tax benefits for corporates who invest money into research as part of their ‘Corporate Social Responsibility’ (CSR). This will benefit both the corporates in saving taxes and the government in seeking funding.
• Once the NRF takes control of the research landscape, it will have to create such conditions that incentivize the development of private sector organizations that see value in invention and developing proprietary technology.

Mains Question:

Q. What are the main issues plaguing India’s research architecture and how will National Research Foundation (NRF) Bill, 2023 address them.