New Delhi, Feb 1 (PTI) – Demonstrating a strong commitment to research and development, Union Finance Minister Nirmala Sitharaman announced an allocation of ₹20,000 crore to the Department of Science and Technology to establish a fund aimed at fostering innovation driven by the private sector. This follows her previous announcement of a ₹1 lakh crore research and development fund in last July’s budget. The recent allocation is intended to initiate the fund, which will focus on supporting research and development in deep tech and emerging sectors. “To implement the private sector-driven Research, Development and Innovation initiative introduced in the July budget, I am now allocating ₹20,000 crore,” Sitharaman stated.
While presenting the Union Budget for the 2025-26 fiscal year, the finance minister also mentioned plans to explore a Deep Tech Fund of Funds to stimulate next-generation start-ups as part of this initiative. Abhay Karandikar, secretary of the Department of Science and Technology, emphasized that this allocation would significantly enhance support for private sector research and development in deep tech and sunrise sectors, contributing to strategic autonomy in key technology areas.
The government aims to encourage the private sector to engage more in research and development, which has lagged despite existing tax incentives. The Economic Survey presented in Parliament highlighted concerns regarding the private sector’s reluctance to invest in research and development. Chief Economic Advisor V Anantha Nageswaran noted that private sector spending on research and development remains low, despite numerous government incentive schemes. He pointed out that the government currently accounts for 50% of total research and development expenditure in the country, while business enterprises contribute only 41%. Nageswaran also expressed concerns about the sector-specific investments made by the private sector in research and development, urging improvements in this area.
The Department of Science and Technology, as the lead ministry for this fund, saw its budget allocation rise significantly from ₹8,029 crore to ₹28,508.90 crore. The Department of Biotechnology received ₹3,446.64 crore, an increase of ₹1,170.94 crore from the previous budget of ₹2,275.70 crore. The Department of Scientific and Industrial Research was allocated ₹6,657.78 crore, up from ₹6,323.41 crore in the 2024-25 fiscal year. The Department of Atomic Energy’s allocation stands at ₹24,049.10 crore, compared to ₹24,968.98 crore previously, while the Department of Space received ₹13,416.2 crore, an increase from ₹13,042.75 crore. Additionally, the budget allocated ₹10,230.2 crore to various initiatives under the Indian Space Research Organisation (ISRO).
