Overview of the ₹1 Lakh Crore Research Development Innovation Scheme

Overview of the ₹1 Lakh Crore Research Development Innovation Scheme

The Union Cabinet has recently approved a substantial ₹1 lakh crore Research, Development, and Innovation (RDI) scheme. This initiative aims to enhance private sector investment in crucial areas of science, technology, and innovation. The scheme focuses on supporting strategic sectors, also known as sunrise sectors, by providing long-term, low-cost loans to foster growth and innovation.

Importance of the RDI Scheme

This scheme is critical for stimulating private sector investment in research by alleviating financial constraints. It is designed to:

• Encourage innovation: By providing financial support, the scheme promotes creative solutions and advancements.
• Improve competitiveness: It allows businesses to invest in cutting-edge technologies, thereby enhancing their market position.
• Support new technologies: The funding will help in the development of next-generation solutions.
• Promote economic growth: By investing in emerging areas, the scheme aims to boost the overall economy.

For instance, a startup focusing on electric vehicle batteries could secure long-term loans at minimal interest rates to power its research and development (R&D) activities.

Types of Funding Provided

The RDI scheme will facilitate long-term financing or refinancing at low or even zero interest rates, significantly easing the financial burden on companies. For example, a firm innovating in solar cell technology can borrow funds for 15 to 20 years at an interest rate of 1%, compared to the standard 10 to 12%.

funding structure

The scheme operates through a two-tiered funding structure:

• Tier 1: A Special Purpose Fund (SPF) will be established within the Anusandhan National Research Foundation (ANRF), which is chaired by the Prime Minister. This body will provide strategic direction for the scheme.
• Tier 2: The SPF will allocate funds to second-level fund managers, who will extend long-term concessional loans to eligible R&D projects. For example, a biotech startup may apply for a low-interest 10-year loan to develop a new cancer treatment.

Support for High-End Technologies

Yes, the scheme is set to finance transformative projects that:

• Exhibit high technology readiness levels (TRL).
• Are deemed critical for national interest.
• Require advanced technological infrastructure.

An example includes projects utilizing quantum sensors for navigation in submarines, even in the absence of GPS.

Oversight and Monitoring

The governance of the scheme will be overseen by the board of the ANRF, which includes the Prime Minister. This board will ensure the effective implementation and establish funding priorities aligned with national interests.

Synopsis

The ₹1 lakh crore RDI scheme is poised to offer long-term, low-interest loans to the private sector, aiming to accelerate innovation in strategic and emerging sectors. Managed through a two-level funding system under the ANRF, this initiative is expected to significantly benefit fields such as artificial intelligence, renewable energy, biotechnology, semiconductors, and defense. The overarching goal is to foster self-reliance in cutting-edge technologies while enhancing the role of the private sector in national research capabilities.

Frequently Asked Questions (FAQs)

Q1. What is the primary objective of the RDI scheme?
Answer: The RDI scheme aims to boost private sector investment in science and innovation by providing long-term, low-cost loans, thus facilitating research and development in strategic sectors.

Q2. How will the funding structure of the RDI scheme work?
Answer: The scheme features a two-tiered structure, with a Special Purpose Fund (SPF) under the ANRF managing funds and distributing long-term concessional loans to eligible projects.

Q3. Who oversees the implementation of the RDI scheme?
Answer: The governing board of the ANRF, chaired by the Prime Minister, will oversee and guide the implementation and funding priorities of the RDI scheme.

Q4. What types of projects can benefit from this scheme?
Answer: Projects in emerging technologies like artificial intelligence, biotechnology, and renewable energy that demonstrate high technology readiness levels can qualify for funding.

Q5. What are the expected benefits of the RDI scheme for startups?
Answer: Startups can access low-interest, long-term loans to support their research activities, fostering innovation and enhancing their competitive edge in the market.

UPSC Practice MCQs

Question 1: What is the total funding approved for the RDI scheme?
A) ₹50,000 crore
B) ₹1 lakh crore
C) ₹2 lakh crore
D) ₹75,000 crore
Correct Answer: B

Question 2: Which body is responsible for the strategic direction of the RDI scheme?
A) Ministry of Finance
B) Anusandhan National Research Foundation
C) NITI Aayog
D) Ministry of Science and Technology
Correct Answer: B

Question 3: What type of interest rates will the RDI scheme provide?
A) High interest rates
B) Low or zero interest rates
C) Fixed interest rates
D) Variable interest rates
Correct Answer: B