While India's public R&D expenditure on healthcare as a share of Central Government spending on R&D has increased to 5.5%, a figure that is now comparable to that in Germany, it remains low compared to over 25% in the US, says RUSTOM KERAWALLA
There is a need to proactively address the issue of India’s underdeveloped research and development (R&D) infrastructure to meet the demands for quality education and healthcare.
If numbers are anything to go by, India’s expenditure on R&D has continued to remain stagnant at 0.7% of Gross Domestic Product (GDP) for close to three decades, with the public sector accounting for 51.8% of national R&D expenditure. This compares to around 2.8% of GDP for the US, 2.1 per cent of GDP for China, 4.4% of GDP for Korea and around 3% for Germany where the private sector remains prominent through its spending on R&D.
Furthermore, while India’s public R&D expenditure on healthcare as a share of Central Government spending on R&D has increased to 5.5%, a figure that is now comparable to that in Germany, it remains low compared to over 25% in the US and around 9% in Korea.
R&D for new health technologies is an essential part of the solution to the emerging health challenges and one of the biggest drivers of health improvements. Moreover, health R&D has a multiplier effect. It not only saves and improves lives, but also creates cost savings and drives economic growth. While the Government has set a target of increasing the investment in R&D to 2% of GDP by 2022, whether this would be feasible in the post-Covid-19 scenario, is too early to predict. Over a period of time, healthcare has become one of the key priorities of the Central Government for which it has launched new policies and programmes to boost local access and affordability to quality healthcare.
It is imperative to improve the quality of various education institutions along with quantitative expansion. Also, academic institutions are generally considered as the research undertakings driving innovation at the most elementary level in a sector. Over a period of time, various expert committees have observed the importance of private sector investment in higher education to raise this expenditure.
For a country of India’s size and at its stage of development, relying primarily on public expenditure for initiating R&D activities will subsequently lead to inefficient use of limited resources, besides delay in capitalising its vast potential.
The inclusion of private players can be looked at towards creating a robust R&D infrastructure in the country and this way it would be also possible to revolutionise healthcare and education sectors.
It may be noted that private players ensure necessary investments into the prominent sectors of healthcare and education, apart from ensuring more effective resources management through their experience. In a way, strengths of private players will create a win-win situation for all the stakeholders. Besides, it would ensure higher quality and timely development of R&D infrastructure. Thus, private sector expertise and experience can be suitably utilised in promotion of R&D infrastructure on a long-term basis.
The writer is Chairman of Ampersand Group
