The Cabinet on Tuesday approved Rs 1 lakh crore scheme to support research & development and innovation (RDI) in sunrise domains and finance–technology projects. The intent also is to facilitate acquisition of technology and set up deep-tech fund of funds.
The funds will be allocated from the Union budget as a 50-year interest-free loan to the the Anusandhan National Research Foundation (ANRF), which will be leveraged for multiplier effect. The scheme is expected to run for several years, and play a key catalytic role for augmenting domestic R&D, which is crucial for technology assimilation for the manufacturing industry and improving overall economic productivity.
Recognising the critical role that the private sector could play in driving innovation and commercialising research the RDI Scheme aims to provide long-term financing or refinancing with long tenors at low or nil interest rates, the government said in a statement.
The Governing Board of tbe ANRF, chaired by the prime minister, will provide overarching strategic direction to the scheme, whereas an executive council (EC) will approve the scheme’s guidelines, and recommend second level fund managers and scope and type of projects in sunrise sectors.
The RDI 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. 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, the government said.
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.
By addressing the critical need of 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, it added.
The scheme has been designed to overcome the challenges in R&D funding in 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 government said.
Among the key objectives of the scheme is to encourage the private sector to scale up RDI in sunrise domains and in other sectors relevant for economic security, strategic purpose, and self-reliance. Moreover, it will finance transformative projects at higher levels of technology readiness levels.
It will also support acquisition of technologies which are critical or of high strategic importance and facilitate setting up of a deep-tech fund of funds.
An Empowered Group of Secretaries (EGoS) 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 will serve as the nodal department for implementation of RDI Scheme.