Budget allocation brings new apex research body to life

The government of India’s allocation for innovation and research, announced in the budget this week, will be the first for the Anusandhan National Research Foundation (ANRF), which effectively allows the new, overarching research agency to become operational this year.

The budget also allocated funding for space research, world-class universities, and skills development, with additional provision for a new internship scheme and vocational education loans.

India’s Finance Minister Nirmala Sitharaman presented the Union Budget on 23 July. It provided a significant funding pool equivalent to about US$12 billion to ANRF. The bill setting up the ANRF was approved by parliament in August 2023.

The ANRF, which combines several existing research funds into one, with additional public-private partnerships and other financial measures to fund university research, is a crucial part of the government’s efforts to boost research and innovation.

It will be the country’s apex research body providing high-level strategic direction for scientific research in the country, in line with the government’s National Education Policy 2020 (NEP).

Its goal is to seed, grow, and promote research and development (R&D) while fostering a culture of research and innovation across India's universities, colleges, research institutions, and R&D laboratories.

“For our tech-savvy youth, this will be a golden era,” Sitharaman said in her budget speech.

Priority areas for the ANRF include climate change, clean energy, semiconductors, artificial intelligence, robotics, cybersecurity, quantum technology, and other emerging fields.

As a result, research in these areas is likely to gain momentum with the just-announced funding allocation.

The ANRF is also designed to support basic research and prototype development and aims to promote private sector-driven research and innovation on a commercial scale, including by backing startups.

Academics and experts noted it will provide startups with essential resources and support, allowing them to thrive, innovate and contribute to India's economic growth and technological progress.

Private sector-led research

Ravneet Pawha, vice-president (global alliances) and CEO (South Asia) at Deakin University, Ahmedabad, said: “A standout feature of the budget is the allocation of US$12 billion to the Anusandhan National Research Foundation, a pivotal move to drive private sector-led research and innovation.”

“As an international university committed to enhancing industry-academia collaboration for crucial R&D, we applaud this forward-thinking approach to innovation, research, and youth development. This is a significant step in the right direction, and its success depends on effective leadership, strategic direction, and robust execution,” Pawha told University World News.

However, Rajesh Jha, a former member of the executive council of Delhi University, warned that with “market driven” research funding, some areas such as tribal studies, Dalit studies, equity, rights and justice, will “suffer adversely”.

“The announcement of funding for ANRF in the budget is a smokescreen to camouflage privatisation and market-driven research in higher education. Clause 17.9 (of the NEP) provides that research is to be conducted in close linkage ‘with industry and private-philanthropic organisations’ too,” Jha told University World News.

He added that the new research agency’s funding structure “evolved through government bodies like the CSIR [Council of Scientific and Industrial Research]”, whereas past grants from the University Grants Commission (UGC) had the advantage of focusing on specialised areas, “which has been more effective in taking care of quality research”.

UGC funding ‘cut’ as central universities hived off

Notably, the budget allocation for the UGC has been reduced to INR25 billion (about US$297 million), down from the revised estimate of INR64.1 billion (about US$763 million) in the previous year – a 60% drop.

In part this is because the budget for central universities (public universities funded by the central government), which previously came under the UGC budget, has been shifted to a separate budget line, UGC chairman Mamidala Jagadesh Kumar explained in a statement.

“This realignment comes with enhanced funding under the central universities budget line,” he said, adding that funding for higher education would see “a significant increase of 8%” over last year’s budget.

Grants for centrally funded public universities saw a hike in the budget of over INR40 billion (approximately US$476 million) with about INR153 billion (about US$1.82 billion) allocated for the 2024-25 fiscal year.

The allocation for the Institutes of Eminence (IoE) has increased from INR15 billion (about US$178 million) in 2023-24 to INR18 billion (about US$214 million) in fiscal 2024-25, to further cement the government’s commitment to promoting ‘world class’ universities.

Academics nonetheless expressed concern that a significant reduction in UGC funding will mean additional challenges for higher education institutions that are already grappling with financial difficulties and limited resources.

Growing the space economy

The government has also been concerned about the low rate at which research is being commercialised.

“Institutions in India develop technologies, but their transformation rate from the lab to the society for the benefit of the people remains low,” according to the finance ministry’s Economic Survey 2023-24 released this month. This gap is more evident in space technologies, the survey noted.

In another boost to science and technology, Sitharaman announced a dedicated venture capital fund of INR10 billion (about US$119 million) aimed at growing the country's space economy fivefold over the next decade.

This goal aligns with the growing significance of space technologies and their potential to contribute to economic growth nationally and globally.

Experts believe the fund will attract significant private investment, promote entrepreneurial ventures, and enhance India's standing in the competitive space industry.

According to the government, the Indian space economy – goods and services for use in the space sector – was approximately US$8.4 billion as of 2023, accounting for about 2-3% of the global space economy.

Internship opportunities

Prime Minister Narendra Modi’s campaign for re-election in May-June was centred on youth employment and skills, and this was also the main focus of the budget delivered in the early stages of his third term as prime minister.

Sitharaman announced a new internship scheme to generate employment for young people.

“Our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 10 million youth in five years,” she said in her budget speech, noting that the participation of companies was voluntary.

She said young people “will gain exposure for 12 months to a real-life business environment, varied professions and employment opportunities”.

Sitharaman also announced a centrally-sponsored scheme for skills development in collaboration with state governments and industry.

She said two million youths would receive skills training over a five-year period and 1,000 post-secondary vocational colleges, known as Industrial Training Institutes, would be upgraded.

“The course content and design will be aligned to the skills needs of industry and new courses will be introduced for emerging needs,” she said.

Kunal Vasudeva, co-founder and managing director of the Indian School of Hospitality in Gurgaon, Haryana state, said the scheme was a “major win” for those pursuing vocational routes.

“It will help people develop practical skills and excel in their fields, bringing more youth into the formal economy,” said Vasudeva.

Additionally, with manufacturing bases in or near districts, there's less need to migrate to cities, reducing mobility. Such initiatives are crucial for hyper-local job creation and boosting the manufacturing sector,” Vasudeva said.

The minister announced that the Model Skill Loan Scheme will be revised to facilitate loans for 25,000 students annually, guaranteed by a government-backed fund. She also announced education loans worth up to 1 million rupees for around 100,000 students in higher education.

“The Union Budget 2024 has astutely addressed India's evolving economic needs with a clear focus on bridging skill gaps and generating employment.

“To ensure that India can reap the demographic dividends of skilling and making Indian youth work-ready, the budget leaves nothing to chance,” said Pawha.

“The internship scheme for 10 million youth in top companies is a commendable initiative, equipping young talents with essential skills and experience. Monetising this scheme and fostering collaboration with state governments and industry will enhance its effectiveness and impact,” she explained.

However, other experts said significant and fundamental changes were needed to boost job creation. Merely providing incentives will not suffice, as these are only short-term solutions. Additional substantial investments in education, skills development and healthcare are essential, together with a focus on manufacturing.

UWN Asia Editor Yojana Sharma contributed to this article.