New Delhi: The Union Cabinet on Tuesday approved the Research Development and Innovation Scheme with a corpus of Rs one lakh crore to spur private sector investment in research.
The scheme, approved by the Cabinet at a meeting chaired by Prime Minister Narendra Modi, aims to encourage the private sector to scale up research, development and innovation in sunrise domains and in other sectors relevant for economic security, strategic purpose, and self-reliance.
The scheme aims to provide long-term financing or refinancing with long tenors at low or nil interest rates to spur private sector investment in research, development and innovation, I&B Minister Ashwini Vaishnaw told reporters.
He said the scheme has been designed to overcome the constraints and challenges in funding of the private sector and seeks to provide growth and risk capital to sunrise and strategic sectors to facilitate innovation, promote adoption of technology and enhance competitiveness.
The initiative will also finance transformative projects at higher technology readiness levels, support acquisition of technologies which are critical or of high strategic importance, and facilitate setting up of a deep-tech fund of funds.
Vaishnaw said the governing board of Anusandhan National Research Foundation (ANRF), chaired by the prime minister, will provide overarching strategic direction to the RDI scheme.
The Executive Council of ANRF will approve the scheme’s guidelines, and recommend second level fund managers and scope and type of projects in sunrise sectors.
An Empowered Group of Secretaries led by the Cabinet Secretary, will be responsible for approving scheme changes, sectors and types of projects as well as second-level fund managers besides reviewing the performance of the Scheme.
The Department of Science and Technology (DST) will serve as the nodal department for implementation of the RDI scheme.
The scheme will have a two-tiered funding mechanism. At the first level, there will be a special purpose fund (SPF) established within the ANRF, which will act as the custodian of funds.
“From the SPF funds shall be allocated to a variety of second level fund managers. This will be mainly in the form of long-term concessional loans,” Vaishnaw said.
The funding to R&D projects by the second level fund managers would normally be in the form of long-term loan at low or nil interest rates.
Financing in the form of equity may also be done, especially in case of startups. Contribution to deep-tech fund of funds (FoF) or any other FoF meant for RDI may also be considered, he said.
By addressing the critical need of the private sector for long-term, affordable financing, the RDI Scheme fosters self-reliance and global competitiveness, thereby facilitating a conducive innovation ecosystem for the country as it marches towards Viksit Bharat at 2047, Vaishnaw said.
