Did the Cabinet Just Approve a Rs 1 Lakh Crore Fund to Enhance Private Research and Innovation?

New Delhi, July 1 (NationPress) The Union Cabinet, led by Prime Minister Narendra Modi, has given the green light for a substantial Rs 1 lakh crore under the Research Development and Innovation (RDI) scheme, which is designed to revolutionize the private research and innovation landscape in India.

The primary goal of the RDI scheme is to provide long-term financing or refinancing options with extended tenors at minimal or no interest rates to stimulate private sector investments in RDI, according to a Cabinet communique.

This approval highlights the government's acknowledgment of the private sector's pivotal role in fostering innovation and commercializing research.

The scheme is structured to address the funding constraints faced by the private sector and aims to supply growth and risk capital to sunrise and strategic sectors, thereby promoting innovation, technology adoption, and enhancing competitiveness.

It encourages the private sector to expand RDI efforts in emerging domains and other areas crucial to economic security, strategic objectives, and self-reliance.

This initiative will enhance financing for transformative projects at elevated levels of Technology Readiness Levels (TRL) and assist in acquiring technologies of critical or high strategic value. Additionally, the scheme is set to facilitate the establishment of a deep-tech fund of funds, as per the communique.

The strategic oversight of the RDI Scheme will be managed by the governing Board of the Anusandhan National Research Foundation (ANRF).

The guidelines of the scheme will receive approval from the Executive Council (EC) of the ANRF, which will also recommend second-level fund managers and the types of projects in the sunrise sectors.

Moreover, an Empowered Group of Secretaries (EGoS), led by the Cabinet Secretary, will be tasked with approving changes to the scheme, designating sectors and project types, as well as selecting second-level fund managers. They will also evaluate the scheme's performance.

The Department of Science and Technology (DST) will act as the nodal department for executing the RDI Scheme.

The RDI Scheme will incorporate a two-tiered funding mechanism, consisting of a Special Purpose Fund (SPF) and long-term concessional loans.

The SPF, established within the ANRF, will manage the funds, which will be allocated to various second-level fund managers, primarily through long-term concessional loans, as stated in the communique.

Funding for research and development projects by second-level fund managers will typically be in the form of long-term loans at low or no interest rates.

Equity financing may also be considered, particularly for startups, and contributions to a Deep-Tech Fund of Funds (FoF) or any other FoF aimed at RDI may also be explored.

By addressing the urgent need for long-term, affordable financing in the private sector, the RDI Scheme aims to foster self-reliance and global competitiveness, ultimately creating a favorable innovation ecosystem as India strives towards a Viksit Bharat by 2047, the communique concluded.