India, Science and Technology:  2008

S&T Financing

 

 

 

Investment in S&T and Innovation in India

 

 

Kasturi Mandal, Vipan Kumar & P Banerjee

 

Investment and expenditure on both S&T and on R&D in India has been rising over the years. Computation of such spending is difficult because agencies from public and private invest or spend on several items that may not be directly accounted for under the respective heads of either R&D or S&T. The latter is a broader category while the former R&D is more inclusive and limited in scope. Moreover, there are several types and tiers of public agencies in the federal setup who are engaged in investment in S&T. Further, there are other modes of public funding especially as through the banking system or fund-based systems targeted to S&T or R&D. Finally, apart from the foreign investment/engagement in R&D the domestic private sector invests in S&T based innovations that are not accounted for under the head R&D. In this context this section attempts to capture the extent and modes as well as structures of such spending/investment primarily by the government.

Investments made in Research and Development by the developed countries and even a few developing countries such as China and Brazil are as percentages of respective GDP higher than made by India. A closer observation of China’s investment in R&D reveals, however, that they have considered many additional parameters under ‘development’ head in the calculation of the total investments in R&D. In the case of India, while calculating R&D in India, developmental expenses have often been excluded, such as private sector expenditure on non-R&D innovation-expenses has been excluded from the R&D head.

 

Data on funding of S&T and R&D: As per the Research and Development Statistics 2004–05, of the DST, Indian expenditure on R&D as percentage of GNP grew from 0.76% in 1992-93 to 0.80% in 2002-03, further rising to 0.89% in 2005-06 (Source: Research and Development Statistics at a Glance: 20007-08, the DST).

The S&T expenditure that includes R&D expenditure is shared by several types of agencies broadly classified under central core S&T ministry, central social sector ministries, central and state governments’ respective expenditures on R&D under education budget, expenditure on education by other ministries at both centre and the states, state governments ministries, public sector undertakings, bank-operated funds (however, in most cases such funds are covered under ministry funds; private bank’s fund as for venture cannot come under that), private sector enterprises, private equities and other forms of innovation funding sometimes undertaken by the NBFCs, social agencies or charities, multilateral/bilateral R&D funding, and foreign private enterprises investing in R&D in India. First mode of analysis of financing could therefore be by types and executing agency.

Another dimension of the analysis might look into the two dimensions of plan-fund and non-plan fund. The former is for investment while the latter for maintenance also remains productive and the R&D output results from both. Therefore it would be better if we could study both types of investment and maintenance funds. A related dimension is the potential confusion while using two modes of description of public funding; to explicate there are two modes, the expenditure on R&D and the expenditure on S&T. The difference often is not obvious, however, R&D could be considered as investment/expenditure on a limited domain of knowledge undertaking while investment/expenditure on S&T has a wider scope covering non-R&D innovations and developmental activities.

 

Problems of data on S&T and R&D: A similar problem remains with partitioning the expenditure/investment on education between research-directed or research-productive and pure teaching unrelated to research. The DST Report commented “There is no reliable data available on R&D in higher Education Sector in the country” (p.37, op cit). In order to calculate the part of education expenses going for R&D, the DST considered “sponsored project mode”, and the “intramural R&D’. This data was not on the universe of universities, postgraduate and other colleges; the data was on a sample of such institutes. However, the “sponsored project mode” might suffer from overlaps, and most importantly the DST methodology assumes that maintenance budgets and even Plan funding on higher education and on technical education unless categorized under R&D should not be productive of research. We would like to hold the view that a typical academic’s salary takes care for both ‘pure and unrelated to research’ component of teaching as well as a component of research even though the academic might not have received a separate grant for R&D. In fact for dedicated R&D organizations the expenditure statement is accepted as the expenditure on R&D even while the dedicated R&D organizations of the country are currently generating very large number of doctorates and are training very large number of doctoral students. Our observation is based upon the notion that teaching and R&D go together.

Under the above assumption the projection of R&D investment/expenditure in the DST Report would appear on the lower side. The Expenditure Reports of respective education ministries under several heads of ‘scholarships’, ‘R&D’, however provide only an indication to the directed R&D fund under budgets of higher and technical education. Two broad methods could attempt to capture this data: (1) an estimation based upon research paper published through the education as indicator of research expenditure and this could have the benchmark against another research-teaching entity such as the CSIR (the CSIR could be producing perhaps between 1000 to 1500 doctorates currently); and (2) number of doctorates produced through in-house research of university/technical education as indicative of expenditure component on research – again here, the difficulty is that CSIR, DAE, Space and others produce very large number of doctorates of the country where university only awarded the degrees. An estimation based on the former method has been included in this section, however, with the caveat that this possible figure would be perhaps lower than the actual expenditure on R&D in institutes of higher education and of technical education.

Moreover with the current thrust of XI Plan S&T on ‘innovation’, our classification and data definition system would need to capture much of the non-R&D that go into innovation. As discussed above, fairly large part of such innovation expenditure by both public and the private are not currently captured under the class of ‘S&T’. The DST data on R&D expenditure is based on the DSIR-registered units known as SIRO, surveyed units reporting R&D, and from CMIE/Ministry of Company and Law Affairs (MCA). The DSIR registration and tax benefits on R&D expenditure are however unrelated. We considered the CMIE database of listed companies as a simpler measure under the assumption that companies have incentives to report R&D constrained however by the competition laws and the business competition environment.

Important also are expenditures made by the very large number of other non-governmental stakeholders as described above, from their respective shares in national income, on several modes of R&D as well as the S&T. Such expenditures/investments cannot be gleaned out from the budget heads of ministries, neither always from respective statements to income tax authority unless tax deductions when applicable have been applied for. More importantly there is currently no singular authority in the country that receives or collects such information. The statistics by the DST could then be considered as representing on the lower side the country’s total expenditure/ investment on S&T and on R&D as % of gross national product.

 

1. Mode of funding and capacity in S&T

Most of funding of R&D/S&T happens through planning coordinated by the planning executive and hard budgeting constraints exercised by the executive of expenditure as well as by the intra-ministry constraints. With variations in the type of ownership of executing fund-recipient there is in general little if any changes in the process of formulation of planned investment. Capacity building is directly related to this process of formulation of planned investment. Another mode that relies on restructuring of the reporting structure of an organization to a different ministry or department might also assist capacity build up through planned investment. This belongs to the domain of executive fiat. Perhaps most important is the coordination (as well as checks and balances) between often conflicting demands upon financial resources by different ministries. Planned financing is perhaps amongst the top coordinators. This mode is least dependent on executive fiat.

Recalling that funding serves multiple purposes, such as for maintenance, asset creation, coordination, and monitoring – the departmental/ministerial planning/budgeting mode seeks to serve these purposes through line departmental arms and activities. Planning/ budgeting undertaken at periodic intervals have set up several mechanisms of executive based coordination and monitoring through both hard budget constraints and project/ program monitoring at the central ministry level and otherwise with the Planning Commission and a few inter-ministerial bodies and with the Prime Minister’s or cabinet office. At lower tiers such allocation functions are undertaken within the department/ministry through very similar processes, however, the lower the tier in hierarchy the stricter is the constraints on flexibility in budgeting. Most often at about the middle tiers of hierarchy execution remains as the task and coordination through management of allocations across budget heads or cash flows become difficult.

Planning and budgeting for S&T: Demands for grants rise up the hierarchy where at the higher tiers the bundling of demands is undertaken. The current Plan, for example, has set the broad principles of bundling and one major norm is ‘Supra’ projects at supra-organizational level, or ‘Mega’ projects at multi-institutional level or at cross-disciplinary level. Budget sets the goals and therefore monitoring standards and modes. The current practice is to also produce an outcome budget apart from the performance budget. Inter-period monitoring of goals achieved and especially the capacity to spend within the pre-fixed parameters of budgetary heads provide the cues to future release of funds. Several documents of the government suggest that the systemic incapacity to spend is a major bottleneck to the growth of S&T budget allocation. The two way process depends crucially upon the interactive mechanisms of bottom-up and head-down flows of information and demands articulation that get bundled at multiple tiers preventing, perhaps often the systemic capacity build up on its own and through this budgetary processes. A moot point therefore is creation of extra-ministry articulation process and devolution of planning and allocative authorities.

Generation of projects, major programs and in short the creation of demand then is another goal of the entire executive process of planning/budgeting. Relative weakness of the systems of S&T to voice demands reflects upon and influences the slow buildup of the systemic capacity. Major projects or mega programs therefore appear to be important. The XI Plan has emphasized amply this dimension. Another related dimension is the capacity of the systems of the stakeholders especially of the society who would voice and which in turn would boot up demands for capacity.

Structures and S&T financing: A related issue is about who sets the agenda, at what structural level and how! For example, alternative approaches to S&T might demand for alternative sources of financing as well as alternative structures of execution. Even more importantly, a plan investment creates an asset that in turn would generate a stream of future assets – hence, contests over current allocations and current agenda have portents for the future allocations. The current planning and budgeting could possibly be looked into for examining how our past investments have generated current streams of resources, capacities, capabilities and research agendas. The most dominant form of allocation has been inter-executive contests and we might not overlook the limited oversight that such contests enjoy. A major gain from multiplicity of executive controls has been the availability of multiple paths and sources to an applicant for finance; however, the same scope often remained unavailable to applicants from the bottom of executive hierarchies. Indian experience is very rich in this area of multiple sources of funding including extramural funding and the learning is that multiple facets of S&T could have been financed albeit often at pitiably low level. Further, multiplicity of executives checks has also buffered against seizure by single agenda.

Along with this executive based approaches to using planning/ budgeting a few other approaches have in recent periods been considered as well as initiated by the government. One important landmark of XI Plan regarding S&T is its underlying theme of innovation. Creation of demand pulls through innovations to generate the subsequent flow of allocations that in turn would create from within as well from without the public system of S&T the dynamism to create additional capacity to absorb funds and build up executive capacity is one of the principal pillars of the current Plan.

This approach has therefore created instruments for funding the ‘bridging’ or linkage functions. The emphasis has been on executive controlled departmental or line ministerial linkages. Other modes of market based or social based linkages too are important. For example, generation of standards or extensive modularization creates the pull for systemic build up through market processes. Another important mode less deliberated upon is the advanced standards-based public procurement or utilization of part of public development fund or part of restructuring fund or of the infrastructure fund to advance induction of new technology. The climate fund is such a strategic restructuring fund. In other words planning/ budgeting exercise along with the creation of incentives system for the advanced knowledge/ products create massive restructuring of the system of S&T while simultaneously building up new capacities. In the current Plan such indications have been provided in relation to the district-based system of S&T management or in relation to incubation of new innovations or in inspiring youth into the folds of new sciences.

Another dimension of public investment is the foregone taxes, tariffs and similar others. The ensuing private investment in new plants and machinery, new measures on quality, standards or say, gains in productivity and efficiency and especially on new technologies are to be set off against the forgone revenues. Private investment on all this have not been computed, however, our preliminary observations on investments for on-R&D innovations indicate that instead of setting off the investments in R&D alone the private enterprises have undertaken in a few sectors the systemic build up of innovation capacity.

 

2. Patterns of funding over period

The ‘Expenditure’ volume from Ministry of Finance reveals that S&T funding takes place under “Science, Technology and Environment” head whereas the Indian Public Finance Statistics offers data under “Scientific Services and Research” head. In both cases, however, revenue expenditure as well as capital expenditure under the respective heads is taken into account. The following figures give an insight into the S&T investment pattern that had taken place in India over the years.

 

Fig 1: Trend of budgetary transactions on “Scientific services and research” head incurred over the years

Source: Indian Public Finance Statistics, 2007-08, Ministry of Finance

 

 

Fig 2: Trend of Revenue vis-s-vis Capital expenditure on “Scientific services and research” head incurred over the years

NOTE: * indicates Revised Expenditure, ** indicates Budgeted Expenditure.

Source: Indian Public Finance Statistics, 2007-08, Ministry of Finance

 

 

Fig 3: Trend of percentage of Plan Expenditure on “Science, Technology and Environment” to the total plan expenditure in the Public Sector

NOTE: * indicates Budgeted Expenditure.

Source: Indian Public Finance Statistics, 2007-08, Ministry of Finance

 

Following the approach of the Planning Commission, we consider three modes of expenditure on R&D/S&T in India:

1. Investment in S&T by central scientific departments, i.e. as shown in Figures 4 and 5

2. Investment in S&T by various socio-economic sector ministries of India, such as the Ministry of Agriculture or the Ministry of Health

3. Various States & Union Territory R&D/S&T investments

However this data would not reflect the large amount of S&T investment carried out at the higher education and technical education level of the Indian education system; only part of which comes from the R&D done in engineering, doctoral and post doctoral studies. Though there seem to be a direct link between the R&D investment and number of PhD’s produced each year, a quantitative analysis is seldom reported in the open literature. It could therefore be inferred that there is an S&T investment (as a fraction) based on;

       4. Expenditure in higher education; and

       5. Expenditure in technical education

 

Apart from that there is a component of R&D investment in terms of

      6. Private sector (especially)listed firms’ investment in R&D and non-R&D innovation including            tax revenues forgone

Above six points are here onwards termed as “Investment in S&T and Innovation” – although as discussed above, investments/expenditures on innovation far exceeds the sum total of these six modes.

 

2.1 Investment by Central Scientific departments

Figure 4 shows the plan wise investment (outlays and actual) by the central scientific departments in India. Investment has taken a steep rise past 5^th five-year plan. Department of Space has shown a dramatic close to 18+% growth rate from 9^th plan to 10^th plan.

 

Fig 4: Plan-wise investment in S&T undertaken by the Core Scientific Agencies

Source: http://www.planningcommission.nic.in/sectors/science.html

 

Figure 5 shows the detailed breakup of the share of various S&T ministries and departments in the 10th plan (outlays). It shows that Department of Space is at the topmost with 52% share of total S&T investments under this sector, followed by Department of Atomic Energy. The DSIR, which includes CSIR, also is at bottom half along with Department of Biotechnology with 10 & 6 % share respectively.

 

Fig 5: Share of various Ministries and departments in the public R&D expenditure in India, Plan Period - 10^th: 2002-2007

Source: http://www.planningcommission.nic.in/sectors/science.html

 

Investment made by the central scientific departments in S&T is represented in various ways, e.g. The Science and Technology Division of the Planning Commission which is the nodal division for all matters relating to Science and Technology Plan formulation (both Five Year Plans and Annual Plans) and appraisal of the S&T programmes gives the plan expenditure only and includes Department of Atomic Energy (DAE) (R&D sector), Department of Ocean Development (DOS) (now Ministry of Earth Sciences), Department of Science and Technology (DST), Department of Biotechnology (DBT) and Department of Space and Department of Scientific and Industrial Research (DSIR) as the six major S&T agencies/Departments. On the other hand Ministry of Finance in its “Trends in Expenditure” gives both plan and non-plan expenditure of revenue account under “Science, Technology and Environment” head that includes the S&T component of Ecology and Environment. As mentioned earlier if we go into the Expenditure budget of respective ministries/departments both the plan and non-plan expenditure of revenue and capital account is traceable. Figure 6 and Table 1 try to capture this fact.

 

Fig 6: Trends in expenditure on Central Plan of revenue account under “Science, Technology and Environment”

NOTE: * indicates Revised Expenditure, ** indicates Budgeted Expenditure.

Source: Expenditure Budget, Vol I, 2007-08, Ministry of Finance

 

 

	2007-08			2006-07			2005-06			2004-05
	Plan	Non-Plan	Total	Plan	Non-Plan	Total	Plan	Non-Plan	Total	Plan	Non-Plan	Total
Revenue Account	1454.40	246.70	1701.10	1188.00	404.40	1592.40	1092.65	393.30	1485.95	821.50	390.74	1212.24
Capital Account	71.60	2.30	73.90	152.00	1.60	153.60	147.35	2.70	150.05	68.50	2.20	70.70
Total	1526.00	249.00	1775.00	1340.00	406.00	1746.00	1240.00	396.00	1636.00	890.00	392.94	1282.94

Source: Expenditure Budget, Vol I, 2007-08, Ministry of Finance

 

Moreover, the DST R&D Statistics includes R&D components of Ministry of Information & Technology, Ministry of Non-Conventional Energy Sources, Agricultural Research and Indian Council of Medical Research (ICMR) besides the ministries/departments included as major scientific agencies by the Ministry of Finance as core scientific agencies. The total expenditure on R&D by major scientific agencies under the Central Government as per the DST publication is Rs 6929.96 crores, Rs. 8238.99 crores, Rs. 9297.67 crores, Rs. 9710.92 crores and 10154.97 crores for 1998-99, 1999-00, 2000-01, 2001-02 and 2002-03 respectively. This report however includes plan and non-plan expenditure as total expenditure.

 

2.2 Investment in S&T in various socio-economic sectors

Various central socio-economic sector ministries have invested significantly (much of which remain unnoticed) towards the S&T development of the nation. The table below throws light on the growth of investment by the sector over the plan periods.

 

	Outlay	Expenditure
Fifth Plan (1974-79)	375.59	308.65
Sixth Plan (1980-85)	1100.91	989.66
Seventh Plan (1985-90)	1953.49	2408.14
Eighth Plan (1992-97)	5105.97	Not available

Source: http://www.planningcommission.nic.in/sectors/science.html

 

Figure 8 shows through the bar graph, in the ascending order, the investment in S&T in the various socio-economic sectors in India for 8^th plan. This also shows the top 10 sectors’ share in percentage in a pie chart. It clearly depicts that Agriculture fetches almost 25% of the total followed by Education sectors, which fetches almost 23%. Telecommunication is at 3rd position with 8% share, Power sector 4^thwith 5%, this is followed by, Petroleum and natural gas ministry, Bio-medical research, Forests and wild life, Steel, Non-conventional energy and Environment. All remaining sectors clubbed together makes 21% of total.

It is unfortunate to mention that after the 8^th plan, planning commission has stopped tracing the expenditure incurred by the central socio-economic sector ministries. An attempt had been undertaken based upon very restricted assumptions to extrapolate only the Plan S&T investment undertaken by such ministries as shown in Figure 7 and Table 3 respectively. It is worth noting that the socio-economic sector invests equally or more often higher than the core scientific agencies in S&T. But such an investment often remains hidden.

The R&D Statistics of DST , however, reports the total R&D Expenditure by Central Ministries other than major scientific agencies to be Rs 1482.19 crores, Rs 1587.27 crores, Rs 1752.54 crores, Rs 1825.40 crores and Rs 1918.01crores for 1998-99, 1999-00, 2000-01, 2001-02 and 2002-03 respectively. As this reveals only the R&D component, we can therfore assume from this value that the actual expenditure on S&T is much more.

 

		Core S&T Central Ministries	Central Socio-economic Ministries
5th Plan (1974-79)	Outlay	436.13	375.59
	Actuals	383.85	308.65
6th Plan (1980-85)	Outlay	799.65	1100.91
	Actuals	1130.1	989.66
7th Plan (1985-90)	Outlay	2022.74	1953.49
	Actuals	2599.05	2408.14
8th Plan (1992-97)	Outlay	4094	4201.863
	Actuals	6125.6	5303.9
9th Plan (1997-02)	Outlay	12022	12339
	Actuals	12068	10449
10th Plan (2002-07)	Outlay	25301.35	25967.95
	Actuals	23641.26	20469.65

NOTE: Data for the 8^th, 9^th and 10^th plan period of Socio economic ministries is calculated assuming that the trend of expenditure remains uniform over the years and is based on averaging the ratio of allocation of Core S&T ministries to the socio-economic sector ministries for the 5^th, 6^th and 7^th plan. The same ratio is the applied to estimate the allocation of the socio-economic sector ministries for the 8^th, 9^th and 10^th plan.

Source: http://www.planningcommission.nic.in/sectors/science.html and extrapolation

 

 

Fig 7: Trend of Expenditure (Outlays & Actuals) on S&T by Core S&T Ministries vis-à-vis Socio-economic sector Ministries (Crore Rs.)

Source: Table 3

 

 

Fig 8: Plan Investment in S&T incurred by respective socio-economic

sector ministries in the 8^th Plan

Source: http://www.planningcommission.nic.in/sectors/science.html

 

2.3  Investment in S&T in various States and Union Territories

The three bar graphs in figure 9 show plan wise budget expenditure (outlays and actual) for all the states and union territories for 8^th, 9^th and 10^th plan period. Gujarat state has the maximum plan expenditure followed by Kerala, Karnataka and West Bengal. Himachal Pradesh, Andhra Pradesh. North Eastern States are among the poorest in S&T expenditure. UP, Punjab, Maharashtra and Tamil Nadu are at the mid level of the expenditure in S&T.

 

Fig 9: State Plan Outlays under S&T sector (Rs in Lakhs)

Source: http://www.planningcommission.nic.in/sectors/science.html

 

States	Actual Expenditure			Approved Outlay
	2002-03	2003-04	2004-05	2005-06	2006-07	2007-08
Andhra Pradesh	21.64	29.35	339.93	84.64	113.64	NA
Arunachal Pradesh	34.22	63.2	34.56	955.11	1020	1022
Assam	79.13	141.03	420	119	0	435
Bihar	0	0	425	1504	0	0
Chhattisgarh	96	198	177.96	475.5	781	795
Goa	114.93	152.66	473.46	370	370	380
Gujarat	5419.73	6216.57	7618.97	14313	2386	7751
Haryana	209.92	383.99	212.72	500	390	324.5
Himachal Pradesh	148.84	45.54	32.18	28	40	44
Jammu & Kashmir	571.24	542.47	516.68	566.21	97	624
Jharkhand	2429	1499.57	2422	3000	150	145
Karnataka	804.94	672.09	1128.5	2360.5	4875.5	29.09
Kerala	2369.65	2967.95	3383.76	4395	5300	6123
Madhya Pradesh	5372.3	2025.1	523.56	1117.5	1085.58	2665
Maharashtra	147.23	298.94	138.5	500	1700
Manipur	221.21	247.94	484.04	834	300	450
Meghalaya	90.67	113.59	120.53	170	185	200
Mizoram	114	91.44	104.5	137.1	144	224
Nagaland	25	296.94	95.78	231	84	172
Orrisa	1747.74	748.14	211.48	812.51	1303.01	2935.01
Punjab	73.08	20	304.25	660	380.3	1769
Rajasthan	96.86	74.61	197.97	266.21	252.21	20
Sikkim	99.11	104.09	95.77	105	110	400
Tamil Nadu	231.75	312.41	349.52	399.84	0	1950.87
Tripura	18.32	66.03	42.14	83.53	235.35	568.81
Uttar Pradesh	1845.19	512.6	1147.82	4700	5097	7657
Uttarakhand	1.45	5	100	600	3385	100
West Bengal	2594.18	599.78	804.8	1795.2	900	1483
Andaman & Nicobar Islands	56.47	55.32	40.58	45	42	40
Chandigarh	36.65	49.6	57.96	92	0	0
Dadra & Nagar Haveli	6	6.03	5.93	10	12	7
Daman & Diu	12.17	14.54	18.84	20	35	30
Delhi	292.15	181.22	225.65	659	510	1725
Lakshadweep	97.89	100.89	122.63	128	134	398

Source: http://www.planningcommission.nic.in/plans/outbody.html

 

As per the data collected and compiled by the DST, the R&D expenditure trend as Rs 1041.40 crores, Rs 1289.88 crores, Rs 1574.32 crores, Rs 1494.33 crores and Rs 1528.39 crores for 1998-99, 1999-00, 2000-01, 2001-02 and 2002-03 respectively by the state governments. It includes both paln and non-plan expenditure. Here the state sector includes R&D Expenditure of State Agricultural Universities (SAU) also.

 

2.4 Estimation of R&D Expenditure in Education Sector

As discussed earlier, a few countries’ including China’s total expenditure on S&T includes higher education and technical education. Considering part of total expenditure in higher education sector goes into R&D that gets reflected in the form of number of PhDs produced, number of publications and investment in technical education – we may under restrictive assumptions, calculate a proxy measure. All such additional expenditure correspond to a net expenditure in R&D, hitherto not fully captured as it appears in the Department of Science and Technology report, thereby reducing the net percentage of GDP spent on R&D. Further, expenditure on S&T would include elements beyond R&D. The DST report follows the definition of the UNESCO. Given existence of multiple definitions, cross-country comparison on R&D or S&T figures appear to be difficult. Expenditure on S&T if taken into consideration, secondary education also has some components on S&T in the schemes like investment of ICT in schools and vocationalisation of education as shown in Figure 10.

 

Fig 10: Trend of investment in select schemes having S&T component under

Secondary Education head

Source: Analysis of budgeted expenditure on education 2007-08, MHRD

 

Figure 11 is indicative of some components of S&T, which is included in the scholarship given to students pursuing career in science. Figure 12 further reveals the investment made by institutions of research, which is a direct R&D investment.

 

 

Fig 11: Trend of investment in select schemes having S&T component under Scholarship head

Source: Analysis of budgeted expenditure on education 2007-08, MHRD

 

 

Fig 12: Trend of investment in “Institutions of research” under University and Higher Education head

Source: Analysis of budgeted expenditure on education 2007-08, MHRD

 

Though intangibles like expenditure in R&D in higher education are difficult to estimate, a rough calculation as based on: assuming total number of publications out of an organization indicates expenditure on R&D, and assuming a known R&D organization as the measure of expenditure per published research paper – one could hazard a guessed expenditure by the university sector. Major sources of mistakes are: the CSIR produces large number of PhDs however; universities have pure teaching that does not come under PhD instruction/guidance.

       The methodology is as follows:

1. Total number of publications by CSIR = n_csir
2. Total budget of CSIR = b_csir
3. Factor of Publication expenditure, f_csir = b_csir/n_csir
4. Total number of publications in Universities = n_univ
5. Total budget for Higher education = b_univ
6. Net component of expenditure on R&D in universities, E_univ = (b_csir/n_csir)n_univ
7. %age of total = (b_csir/n_csir)n_univ X (100/b_univ)

 

Year	ncsir	bcsir	bcsir/ncsir	nuniv	buniv	(bcsir/ncsir)nuniv	(bcsir/ncsir)nuniv X (100/buniv)
1992	1683		0.2772	6748	2443.8	1870.546	76.5425
1993	1682		0.2939	6659	2699.9	1957.08	72.48713
1994	1691		0.3105	6754	3103.6	2097.117	67.57047
1995	1640		0.3272	6882	3525.3	2251.79	63.87514
1996	1725	116.4316*	0.3438	6883	3871.3	2366.375	61.12612
1997	1747	259.3922*	0.3605	6691	4287.9	2412.106	56.25377
1998	1775	402.3528*	0.3771	6980	4859.1	2632.158	54.16966
1999	2050	545.3134*	0.3938	7088	6116.8	2791.254	45.63259
2000	1882	688.2740*	0.4104	6980	8248.4	2864.592	34.72906
2001	2016	831.2346*	0.4271	7288	9194.8	3112.705	33.85288
2002	2190	963.692	0.4438	7910	8087.7	3510.458	43.4049
2003	2337	1090.09	0.4604	8594	8989.6	3956.678	44.01395
2004	2701	1285.99	0.4771	9091	9278.2	4337.316	46.74739

*Department of Ayush was created in the Eighth Plan period.

 

The R&D statistics by DST reports the R&D expenditure in Higher Education Sector as Rs. 378.56 crores, Rs 623.64 crores, Rs 650.94 crores, Rs 714.80 crores and Rs 750.54 crores for 1998-99, 1999-00, 2000-01, 2001-02 and 2002-03 respectively. DST includes data from 106 universities and 27 PG colleges doing R&D and extramural project funding of central funding agencies. The DST report does not take account of the R&D/S&T component of the technical education sector.

Another attempt of an estimation of the R&D component in Higher Education and Technical education is as follows (this is likely to be closer to the actual than the previous method):

Assuming that the trend of expenditure remains uniform over the years - estimation is done by averaging the ratio of total expenditure on revenue account in Univ and other higher education to the expenditure on R&D in Higher Education Sector (Calculated by DST) for 2002-03, 2003-04 and 2004-05. This ratio is then applied for calculating the R&D expenditure in Higher Education (2005-06, 2006-07 and 2007-08) and Technical education (2002-03, 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08).

 

	2002-03 (RE)	2003-04 (Actuals)	2004-05. (Actuals)	2005-06 (Actuals)	2006-07 (BE)	2007-08 (BE)
University & Other Higher Education	750.5	890.6	1056.8	1060.89	1172.955	1500.501
Technical Education	241.1475	278.4878	349.8739	352.2706	401.3833	676.2555
Total	991.6475	1169.088	1406.674	1413.161	1574.338	2176.757

Source: Analysis of budgeted expenditure on education 2007-08, MHRD

 

Fig 13: Estimated Expenditure Trend on R&D in Education Sector (Higher and Technical)

Source: above Table 6

 

Expenditure in Technical Education: Although DST R&D Statistics takes into consideration the expenditure on R&D in Higher Education Sector, the technical education component remains neglected. The tables and figures below give us an idea of the investment in the S&T component, which is very much embedded in technical education system of the country.

 

	1996- 97	1997- 98	1998- 99	1999- 00	2000- 01	2001- 02	2002- 03*	2003- 04	2004- 05	2005- 06	2006- 07 *	2007- 08**
Plan	554.05	619.37	706.33	874.18	735.21	789.35	832.14	870.05	1085.43	1469.48	1929.91	4322.61
Non-Plan	895.96	1003.19	1366.81	1584.78	1792.81	1771.04	2056.36	1963.03	2060.79	2187.52	2461.4	2697.75
Total	1450.01	1622.56	2073.14	2458.96	2528.02	2560.39	2888.5	2833.08	3146.22	3657	4391.31	7020.36

NOTE:  Rs in Crores,  *indicates Revised Expenditure, ** indicates Budgeted Expenditure

Source: Analysis of Budgeted Expenditure on Education, Ministry of Human Resource Development (MHRD)

 

 

Fig 14: Trend of investment in select schemes having S&T component under

Technical Education head

Source: Analysis of Budgeted Expenditure on Education, MHRD

 

 

Fig 15: Research & Development Expenditure under technical education

Source: Analysis of Budgeted Expenditure on Education, MHRD

 

Several central socio-economic sector ministries also invest in education and training (formal and informal) significantly. It can be well assumed that such investment mostly comprise of the S&T component. Tables 8 and 9 throw light on this aspect of S&T investment often not accounted for while calculating total S&T investment.

 

	2005-06 (ACTUALS)
	PLAN	NON-PLAN	TOTAL
MINISTRY OF RAILWAYS (IR)	...	880020	880020
MINISTRY OF AGRICULTURE (MoA)	9908693	7294806	17203499
MINISTRY OF CIVIL AVIATION (MoCA)	...	5395	5395
MINISTRY OF FINANCE (MoF)	4550	...	4550
MINISTRY OF DEFENCE (MOD)	...	617877	617877
MINISTRY OF HOME AFFAIRS (MHA)	2415	320787	323202
MINISTRY OF EXTERNAL AFFAIRS (MEA)	...	33969	33969
MINISTRY OF ENVIRONMENT & FORESTS (MoEF)	1096334	214078	1310412
MINISTRY OF HEALTH & FAMILY WELFARE (MoHFW)	8710297	6425929	15136226
MINISTRY OF INFORMATION & BROADCASTING  (MoI&B)	13354	72549	85903
DEPARTMENT OF ATOMIC ENERGY (DAE)	...	5000	5000
MINISTRY OF RERSONNEL, PUBLIC GRIEVANCES  (MOPPG)	252100	213900	466000
MINISTRY OF POWER (MOP)	...	2361	2361
MINISTRY OF RURAL DEVELOPMENT(MORD)	477992	80200	558192
MINISTRY OF PUNCHAYAT RAJ (MoPR)	98695	...	98695
MINISTRY OF SCIENCE & TECHNOLOGY (DST)	27765	67549	95314
MINISTRY OF SMALL SCALE INDUSTRY & ETC. (MSME)	60860	...	60860
MINISTRY OF LABOUR AND EMPLOYMENT (MoLE)	129195	656825	786020
M/O SHIPPING, ROAD TRANSPORT & HIGHWAYS (MORTH)	10000	112763	122763
MINISTRY OF CULTURE (MOC)	3427928	3027688	6455616
MINISTRY OF TRIBAL WELFARE (MTW)	520795	2770	523565
MINISTRY OF URBAN DEVELOPMENT(MoUD)	39173	86590	125763
MINISTRY OF WATER RESOURCES (MoWR)	46206	227944	274150
MINISTRY OF YOUTH AFFAIRS & SPORTS (MoYAS)	3843226	644887	4488113
M/O CONSUMER AFFAIRS, FOOD & PUB DISTRIBU.. (MOCAFP)	2062	136772	138834
MINISTRY OF MINES (MOM)	7979	...	7979
DEPARTMENT OF WOMEN AND CHILD DEVELOPMENT (DWCD)	985258	...	985258
DEPARTMENT OF OCEAN DEVELOPMENT (DOD)	6470	12670	19140
DEPARTMENT OF EDUCATION ( BOTH DEPTS.)	145525237	32706397	178231634
MINISTRY OF SOCIAL JUSTICE & EMPOWERMENT (NSKFDC)	700578	231379	931957
MINISTRY OF DEVELOPMENT OF N. E. REGION (DoNER )	47052	...	47052
MINISTRY OF TOURISM	2539716	3642	2543358
			( RUPEES IN THOUSANDS )

 

 

	2003-04	2004-05	2005-06	2006-07 *	2007-08**
Plan	12044.4	12877.1	17823.2	24828.1	33351.1
Non Plan	5056.6	5149	5386.6	5808.7	5991.5
Total	17101	18026	23209.8	30636.7	39342.6

NOTE: * indicates Revised Expenditure, ** indicates Budgeted Expenditure

Source: Ministry of Human Resource Development

 

2.5 Expenditure in Private Sector R&D

Private sector R&D is captured using CMIE database. It provides details about the listed companies. Therefore only the partial picture of private funded R&D is presented here. These companies spend on non-R&D innovation that is not reported in accounting tables; hence, our estimates fail to capture the real expenditure in S&T by private companies. In fact innovation expenditure by non-listed large and small including tiny companies appear to be large.

 

Fig 16: Expenditure on R&D by listed companies

Source: CMIE Database

 

Year	Investment (Estimated)
1995	849.1977
1996	1278.5629
1997	1707.9281
1998	2137.2933
1999	2566.6585
2000	2996.0237
2001	3425.3888
2002	3854.7540
2003	4284.1192
2004	4713.4844
2005	5142.8496
2006	5572.2147
2007	6001.5799
2008	6430.9451

Source: CMIE Database

 

It is to be noted that only the R&D component of private sector is traceable, whereas again here investment in S&T must be much higher.

 

 

 

 

 

References:

1. Planning Commission reports 1^st to 11^th plan
2. China Yearbook 2006
3. Department of science and technology
4. Central Advisory board on Education, NIEPA, 2005
5. Analysis of Budgeted expenditure on R&D, 2005-06 & 2007-08, MHRD

 

 

 

 

 

 

 

ANNEXURE I

 

Outlays/Expenditures of Central Scientific Ministries/Departments/Agencies (Rs. in crores)
Sl. No.	S&T Deptt./Agencies	11th Plan (2007-12)	Annual Plan 2007-08		Annual Plan 2008-09
		Outlay	BE	RE	BE
1	Deptt. of Atomic Energy  (DAE )(R&D  Sector)	11000.00	1215.00	1040.10	1228.00
2	Ministry of Earth Sciences/ Deptt. of Ocean Development(DOD)	7004.00	690.00	437.00	750.00
3	Deptt. of Science & Technology (DST)	11028.00	1526.00	1270.00	1530.00
4	Deptt. of Biotechnology (DBT)	6389.00	675.00	683.00	900.00
5	Deptt. of Scientific & Industrial Research inclu. (CSIR)	9000.00	1070.00	1060.00	1200.00
6	Deptt. of Space (ISRO)	30883.00	3420.00	2831.00	3600.00
	Grand Total	75304.00	8596.00	7321.10	9208.00

Source: http://planningcommission.nic.in/sectors/science.html

 

 

Agency-wise Support to Extramural R&D projects approved during 2005-06
Department/Ministry/Agency	No. of Projects		Total Approved Cost
	No.	%age	(Rs.Crore)	%age
All India Council of Technical Education (AICTE)	138	3.87	9.83	0.85
Council of Scientific and Industrial Research (CSIR)	247	6.92	24.21	2.08
Defence Research & Development Organisation (DRDO)	137	3.84	30.37	2.61
Department of Atomic Energy (DAE)	115	3.22	19.51	1.68
Department of Ayurveda, Yoga & Naturopathy, Unani, Siddha & Homeopathy (AYUSH)	1	0.03	0.15	0.01
Department of Bio- Technology (DBT)	422	11.82	174.73	15.02
Department of Coal (DOC)	11	0.31	21.53	1.85
Department of Ocean Development (DOD)	7	0.2	1.07	0.09
Department of Science & Technology (DST)	1297	36.34	572.11	49.16
Department of Scientific & Industrial Research (DSIR)	9	0.25	8.39	0.72
Indian Council of Mediacal Research (ICMR)	207	5.8	57.29	4.92
Indian Space Research Organisation (ISRO)	41	1.15	4.35	0.37
Ministry of Communciations & Information Technology (MOCIT)	42	1.17	183.85	15.8
Ministry of Environment & Forests (MOEF)	56	1.57	23.12	1.99
Ministry of Power	20	0.56	3.53	0.3
Ministry of Social Justice & Empowerment (MOSJE)	5	0.14	0.72	0.06
Ministry of Water Resources (MOWR)	41	1.15	9.79	0.84
Petroleum Conservation Research Association (PCRA)	15	0.42	1.3	0.11
University Grants Commission (UGC)	758	21.24	17.95	1.54

 

Source:Directory of Extramural R&D Projects, DST, 2007

 

 

 

 

State Plan outlays under S&T Sector
S. No	States/UTs	7th  Plan	7th  Plan	8th Plan	8th Plan	9th  Plan			9th  Plan		10th Plan	10th Plan	Annual  Plan
		1985- 90	1985- 90	(1992- 97)	(1992- 97)	(1997- 02)			(1997- 02)		(2002- 07)	(2002- 07)	(2007- 08)
		Outlay	Actuals	Outlay	Actuals	Outlay			Actuals		Outlay	Anti. Expdr.	Outlay
1	A.P.	610.00	208.00	200.00	114.00	937.00			556.00		500.00	261.10
2	Arun. Prad	12.00	19.92	47.00	67.00	105.00			303.00		420.00	2055.69	1012.00
3	Assam	300.00	376.00	462.00	644.00	1350.00			348.00		750.00	979.25	416.00
4	Bihar	300.00	430.00	782.00	227.00	2154.0	@			607.00	0.00	3124.00	0.00
5	Chhattisgarh										300.00	1733.69	695.00
6	Goa	110.00	127.20	300.00	153.00	308.00			182.00		175.00	941.37	136.00
7	Gujarat	450.00	88.00	550.00	262.00	3125.00			8802.00		29835.00	34504.27	3689.00
8	Haryana	165.00	310.00	662.00	352.00	642.00			506.00		565.00	2945.00	225.50
9	H.P.	100.00	79.00	275.00	276.00	600.00			601.00		592.00	220.03	37.00
10	J&K	100.00	38.00	190.00	136.00	320.00			1114.00		3619.00	2265.63	536.00
11	Jharkhand					0.00			1298.00		33000.00	19516.01	145.00
12	Karnataka	200.00	312.00	800.00	1196.0	2500.00			1066.00		1293.00	11347.12	1849.00
13	Kerala	1700.0	2302.00	2193.0	3995.0	7500.0				8028.00	12000.00	23241.73	5373.00
14	M.P.	650.00	626.00	641.00	767.00	935.00			556.00		858.00	4598.97	1888.00
15	Maharashtra	200.00