Proposed National Research Foundation looks to tap CSR funds

The proposed National Research Foundation (NRF), a new centralised body to fund research, envisages an allocation of ₹50,000 crore over the next five years, with close to ₹36,000 crore coming in from the private sector. However, there is uncertainty on the measures in place to ensure that such funds flow in as well as the degree of autonomy the body can exert.

Among the measures being mooted is to have private companies and public sector entities contribute from their ‘corporate social responsibility (CSR)’ corpus to the NRF, multiple sources involved in the framing of the NRF told The Hindu.

Data from the Ministry of Corporate Affairs says that during the financial year 2021-2022, companies spent ₹14,588 crore as part of their CSR obligations. CSR trends suggest that nearly 70% of such funds were spent on education, healthcare, and sanitation projects. Moreover, the nature of CSR funds is that government does not direct corporates to spend in specific sectors, Minister of State for Corporate Affairs Rao Inderjit Singh told Parliament last year.

Case for tax incentives

The NRF Bill, 2023, was approved by the Union Cabinet on June 28 and is likely to be tabled in Parliament this year. While a draft explaining the structure and motive of the NRF was available for public comments in 2020, multiple changes are under way since. The two main objectives of the NRF are to boost private sector contribution to research in India and ensure that a greater slice of the funds apportioned by the government make its way to State universities and colleges. “We’ll probably have to force, request or maybe give some tax incentives to corporates to give their CSR money to NRF,” a person close to the NRF Bill drafting process told The Hindu, on condition of anonymity.

Statistics from the Ministry of Science and Technology suggest that only 36% of India’s research expenditure – of roughly ₹1.2 lakh crore – came from the private sector in 2019-20, when the latest such figures were published. This was one of the reasons why India’s expenditure on R&D was hovering around 0.6% of the Gross Domestic Product (GDP), well below the 1-2% that was characteristic of countries with a stronger science and technology infrastructure and the global average of 1.8%. In China, Japan, South Korea and the U.S., the private sector pooled in 70% of the research expenditure. About 70% of India’s research funds were taken up by the Defence Research and Development Organisation, the Department of Space (DoS), the Department of Atomic Energy and the Indian Council of Agricultural Research (ICAR). The Ministry of Science and Technology, the Council of Scientific and Industrial Research (CSIR) and the Indian Council of Medical Research (ICMR) garnered about 20%.

Since 2000, when the share of the industrial sector (private and public) in overall research expenditure was at its lowest of about 20%, it gradually rose to its maximum of 45% in 2012-13. It has since remained flat, and in some years fallen, with the latest available figure being 41% in 2020-21, according to the DST.

“There are programmes within the Science and Engineering Research Board (SERB) where industry and government collaborate on industrial research by investing 50% each,” said a senior official of the Department of Science and Technology (DST). “There are opportunities and industry is willing. However, we need NRF because under the current rules, it is difficult for private sector to directly invest in government research.”

The SERB is expected to be subsumed under the NRF. The Department of Science and Technology (DST) will be the administrative department of NRF, which will be governed by a board consisting of eminent researchers and professionals across disciplines. “Since the scope of the NRF is wide-ranging – impacting all Ministries – the Prime Minister will be the ex-officio -president of the Board and the Union Minister of Science & Technology & Union Minister of Education will be the ex-officio vice-presidents. NRF’s functioning will be governed by an executive council chaired by the Principal Scientific Adviser to the Government of India,” the Science Ministry said in a statement.

Autonomy challenge

Another senior scientist intimately aware of the processes around the NRF said a major challenge to private sector funding revolved around autonomy. “The NRF was envisioned as a body that would be autonomous. The money given to it wouldn’t be controlled by the general financial rules (laid down by the Ministry of Finance) and the CEO as well the board would have autonomy in directing research funds. The proposed structure, however, has both the Science Minister and Education Minister as vice-presidents. The Science Ministry will administratively control it. The clauses on autonomy must be clearly spelt out, else it will end up like multiple attempts in the past.”

Another of the stated aspirations of the NRF is to remove “inequality” in research funding. Half the available research funding is taken up by researchers at the Indian Institutes of Technology, the Indian Institute of Science, the Indian Institutes of Science Education and Research and some Central Universities. Whatever remains goes to State universities, which outnumber – both in personnel and institutions – the Centrally funded organisations. “We need to see that State universities also get funded adequately for research, said Minister for Science and Technology Jitendra Singh at a briefing with reporters following the Union Cabinet clearance to the NRF.

Research funds in India are made available via competitive grants, where scientists and researchers put up proposals. “The consequence of this is that the top universities, by virtue of their existing faculty and infrastructure corner most of these grants. Fixing this is a tricky problem,” a science administrator told The Hindu. “One way is changing the award of grants in such a way that proposals jointly submitted by, say an IIT professor and another from a State, is given greater weightage than a single-authored proposal. Over time, this could lead to greater training and learning on writing grant proposals better,” he added.

There was also the concern of funding, he added. “Institutions like the DAE and DoS, which have significant research budgets, have to actively engage with State universities and establish joint research projects. Expecting funds only from the private sector and the science ministries will have limited value.

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