Thanks @SreeM for the pointer towards NEP. I found this very useful doc to understand govt’s thought process. Some snippets for those short on time
India’s research spend has consistently gone up over the last 10 yrs doubling from 60k Cr to 1.27 lakh Cr.
But as a percentage of GDP, it is abysmal at 0.64%. For context, the document compares R&D spends as % of GDP in Germany (3%), Japan (3.5%) and Singapore (2%). The pace of our investments in R&D have to pick up substantially to reach our aspirational target of 2% of GDP. Imagine GDP growth at 7-8% and a 3x increase driven by increased spend as % of GDP which should make the market itself grow 25% CAGR over the next decade as we catch up.
Split-up of universities
In India the govt. is the main contributor to R&D spend. The closest to us is Russia. This is the reason why DRDO, ISRO, BARC etc. are the highest spenders as of now
Over time this trend should shift where higher educational institutions (HEIs) pick up the spends and this is what the document is recommending and highlighting lot of steps for the same. It is not a coincidence that IISc, IITs and other pvt. colleges have picked up the R&D spend over the last year or so.
Research and Development Cells (RDC) are now being setup in HEIs with UGC establishing guidelines for RDCs (This doc is also worth reading)
This has been embraced by 2500 HEIs and 300 universities already as per this doc. As per NRF Bill of 2023, 50k Cr has been allocated to oversee R&D initiatives!
NIRF (National Institutional Ranking Framework) participation has gone up over last 3 yrs. Institutions are focusing on research spends to boost their ranking in NIRF. Here’s the ranking for research institutions
What this means for a business like Holmarc?
So the keys to understanding this are the NEP 2020, R&D spends as % of GDP, R&D Cells in HEIs, NRF Bill for funding, GeM procurements, Make In India and MSE preference and follow the money.