Government Fast-Tracks Rs 1 Lakh Crore R&D Fund for Private Sector Boost

The government plans to activate a Rs 1 lakh crore fund to boost private sector R&D within a few months. Economic Affairs Secretary Ajay Seth confirmed the initiative, aimed at encouraging private R&D investment, which has lagged despite available tax exemptions. The announcement follows Finance Minister Nirmala Sitharaman's proposal.

In a significant move to propel private sector innovation, the government is set to operationalize the Rs 1 lakh crore fund dedicated to research and development within the upcoming months, confirmed Economic Affairs Secretary Ajay Seth on Thursday.

Acknowledging the slow uptake of R&D investments by the private sector, despite existing tax exemptions, Seth highlighted the government's strategic role in partnering to encourage more risk-taking in innovation. In pursuit of this goal, financial technology experts and industry leaders have been actively consulted.

This initiative aligns with Finance Minister Nirmala Sitharaman's earlier announcement on February 1, 2024, aiming to create a mechanism for private sector-driven R&D at a commercial scale, thus catalyzing an innovation-financing pool worth Rs 1 lakh crore.

(With inputs from agencies.)