India's technology priorities

By N. Gopal Raj

IN MODERN times, when a country's technological strength translates into economic growth and power, how research and development are focussed and carried out cease to be matters of merely academic importance. Despite the growth of the private sector, government funding continues to account for nearly three- quarters of India's R&D spending. So, how the Government allocates the money has profound implications for the economy. In a paper published in a recent issue of the Economic and Political Weekly, Prof. S. Chandrashekar and Mr. K. P. Basvarajappa of the Indian Institute of Management, Bangalore, have looked at the Government's R&D allocations in various sectors. They found that the R&D expenditure rose from Rs. 7,479 crores in 1994-95 to Rs. 14,164 crores in 1999-2000. Even in dollar terms (which would compensate for inflation), there had been an increase from $2.49 billion to $3.15 billion. During the same period, the Government's share of R&D expenditure actually increased from 76.8 to 79.6 per cent, and the share of industry declined commensurately.

The strategic sectors of defence, space and atomic energy get the biggest chunk of the Government's R&D expenditure. Their share of the pie rose from 48 per cent in 1994-95 to 52 per cent by 1999- 2000. Defence received the largest increase during this period. This, the article remarked, was not surprising in view of India's decision to go nuclear and build a strategic nuclear arsenal.

In contrast, agriculture got about 13 per cent of the R&D expenditure in 1999-2000, science, technology and industry about 15 per cent, health nearly nine per cent and information technology a little less than three per cent.

The paper has focussed on looking at these allocations and comparing them to the potential for economic returns and growth from these sectors. Gross Value Addition (GVA) has been taken as the measure of the economic importance of an area. The GVA during 1999-2000 for the three strategic sectors taken together comes to Rs. 5,532 crores. In contrast, agriculture has a GVA of Rs. 4,45,183 crores and science, technology and industry a GVA of Rs. 4,03,907 crores, almost 70 to 80 times greater than that of the strategic sectors. The health sector has a GVA of Rs. 26,920 crores and information technology a GVA of Rs. 29,931 crores.

World trade in agriculture increased from $438 billion in 1993 to $544 billion in 1999. ``Even if India can capture a small part of this trade, it can serve as a major catalyst for economic growth,'' the paper noted. As it was, agricultural exports during 1998-99, valued at $5.6 billion, accounted for nearly 18 per cent of India's exports. If the largely cotton-based textiles and garments were included, agriculture and related areas would account for nearly 45 per cent of the exports. Although India was one of the world's largest producers of most agricultural commodities, with a large domestic consumption, its crop yields were much lower than world standards. There was also a dearth of downstream infrastructure and technologies for food processing. ``If India can use technology and its strong domestic agricultural base for improving its exports, it might actually give India greater global influence than any nuclear arsenal,'' the paper said.

Although allocations for science, technology and industry rose in absolute terms between 1994-95 and 1999-2000, its share in total Government R&D funding fell from nearly 19 per cent to about 15 per cent. The funding covers not only support for basic science and research, but also caters to major industrial sectors such as power, steel, petrochemicals and textiles. Even minor improvements in technology in some key areas and their diffusion can have major economic effects, says the paper. Meeting Indian needs through proper choices of technology would create the new product and industry lifecycles that would accelerate economic growth. This not only required a substantial increase in funding and competence building in the Government sectors, but also projects and programmes which would create the necessary informal and formal networks for the largescale diffusion of technology.

In the U.S., many new developments, including the Internet, came out of defence funding. By contrast, the erstwhile Soviet Union, in spite of high levels of military R&D and technology funding, was unable to create systems that allowed developments in the defence sector to diffuse into the economic mainstream. In spite of efforts to change the structure and pattern of relationships within the defence sector in India to promote enterpreurship and innovation, India was still more like the Soviet Union than the U.S., the paper said.

The role of atomic energy in the overall power scenario needed to be addressed at the national level. Coal, other fossil fuels as well as hydroelectric power were still the mainstay of the power sector and were likely to remain so for at least some time into the future. Critical technologies which could improve the efficiency of these power sources could do with more Government support, the paper said.

While economic measures alone could not truly represent the importance of a sensitive and strategic sector such as defence, the increased allocations did raise concerns regarding technology trade-offs within the defence sector as well as with other economically important sectors, it noted. Supporting the development of a nuclear deterrence as well as improving conventional war fighting capabilities simultaneously would require substantial resources.

This would necessarily have to come out of an already overstretched and inadequate Government R&D kitty. In spite of the best of intentions, economically very important areas would have to suffer to take care of these security concerns, it added. Some reversal of the trend favouring the strategic sectors may be necessary, the paper stated. ``If India's potential in agriculture, industry and services is to be transformed into national capabilities,'' it added.

Saying it was essential that basic research be reinforced, Dr. A.P.J. Abdul Kalam, Principal Scientific Adviser to the Union Government, pointed out that the Government was considering increasing its R&D expenditure, gradually and purposefully. Asked for his reaction to the paper, Dr. Kalam said India was able to respond to the challenge posed by sanctions because it had developed self-reliance in strategic technologies that came from industrial strength, food security and its human resource, particularly in Information Technology.

Besides, nearly 10 per cent of the expenditure of each of the three strategic departments went for academy research. Another 30 per cent of the budget of each of these departments went to industry for product development in certain cases and mostly production in which there was a substantial R&D component. Apart from providing strategic products and services, the three strategic departments also contributed to national economic development, observed Dr. Kalam. All these contributions, too, needed to be taken into account.

``While I cannot argue for an increase in the budget for defence science, atomic energy and space, I certainly agree that our marginal inputs into crucial areas of science and technology will have a catastrophic effect in the years to come,'' said Prof. C.N.R. Rao, a person closely involved in the formulation of science policy for many years. The decline, he said, had started about 10 years back. ``We will probably see the results vividly in about 10 years when our industry, academia and other sectors require high quality science at the cutting edge for various purposes. Innovations in technology cannot occur without the right investments in science. It is not enough if some MNCs or foreign R&D institutions carry out work here.''

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