The Indian budget attracts a disproportionate amount of attention from the media and the stock market types. Yet, an important piece in the budget almost went largely unnoticed until the authors of this OpEd in the Indian Express decided to educate us.
“Paragraph 79 of the recent budget speech reads: “To implement private sector driven research, development and innovation initiative announced in the July budget, I am now allocating Rs 20,000 crore.” This is an important milestone in the history of Indian science policy.”
The authors in a recent paper have argued how government funding of research through private universities and firms gives more bank for the buck for taxpayer’s money. They cite global examples:
“In France, defence research is funded by the government and happens in private defence firms. In the US, 80 per cent of NASA’s budget is contracted out to private firms and universities. NASA does not make spacecraft: Private vendors do. The Jet Propulsion Laboratory (JPL) plays a critical role in NASA’s exploration of the solar system. It will come as a surprise to many to realise that JPL was created in a private university (Caltech) in 1936. From 1954 onwards, it has been the recipient of contracts and resources from NASA for its operational role in NASA’s space exploration. The recent accomplishment of Deepseek in China shows how innovative energy comes about in a country: The (private) team that created DeepSeek cut their teeth in computer science doing algorithmic trading.”
Until recently, India had preferred to invest in science and technology through government run organisations to the extent that hitherto private organisations such as Tata Institute of Fundamental Research (TIFR) and Bhabha Atomic Research Centre (BARC) were brought under the government fold:
“It is not enough to have engineers in ISRO who put a craft on the moon. Those engineers should be in universities and private organisations so that this level of imagination, ambition and knowledge is applied pervasively in society.”
They make their argument basis how risk, inherent in research, gets rewarded in the private context:
“There is a natural connection between risk in research, and contracting out to private persons. Government can contract out the same research problem to multiple implementers who take different pathways. Some pathways would fare poorly, and the flow of money into them would be stopped. Such unfolding of risk is harder when laboratories and bureaucracies are built in government organisations.
When a private firm is working in an area (for example, an automobile component firm that’s challenged to produce ball bearings of a superior spec), it will try to do the research well, because it also has a direct interest in the knowledge sought to be produced. Such a firm would bring knowledge from its normal operations into the contracted research; it would care deeply about the work and execute it well, and then the knowledge produced through the publicly funded research would spillover into its economic success.”
But things are changing. Not just the budget announcement:
“An important new organisation, Anusandhan National Research Foundation (ANRF), will put out grants at about Rs 2,800 crore a year through new ways. It is likely to break new ground in getting public money to private organisations that will fund early stage research.
… An article in the Financial Times on February 2 says that ISRO will buy launch vehicles made by private persons. Taxpayer money will go to private firms who will do cutting-edge engineering, and the knowledge will feed into civilian applications and global competitiveness.
In recent years, the Ministry of Electronics and Information Technology (MEITY) has worked on using public funding to get more GPUs into private hands, to deepen AI knowledge in India. In the olden days, taxpayer money would have gone into a government organisation (for example an IIT), and the equipment would have been used by state functionaries. Instead, MEITY has aligned with the new paradigm. They have procured 18,693 GPUs, which will be in operation at multiple private IT infrastructure firms. MEITY will give the use of these GPUs to researchers in Indian private organisations at the price of $1 per hour. This is the philosophy of buy, not make.”
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