Government Finalizes Plans for ₹1 Lakh Crore Private Sector R and D Fund
The Indian government is set to launch a ₹1 lakh crore fund aimed at boosting research and development (R and D) in the private sector, as announced by Economic Affairs Secretary Ajay Seth on Thursday. The initiative, focused on enhancing R and D efforts within private companies, is expected to become operational within the next few months.
Ajay Seth stated that the government is currently finalizing the structure and implementation strategy for the fund, following discussions with key players in the financial technology and industrial sectors. When asked if the fund would be active before February 1, 2025, he confirmed, “In the next couple of months.”
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The move comes as private sector R and D investment has remained limited, despite the availability of tax exemptions for R and D. To address this, the government plans to partner with private entities, encouraging them to take on the risks associated with large-scale R and D projects.
This initiative was originally introduced by Finance Minister Nirmala Sitharaman during the Interim Budget for 2024-25 on February 1, 2024. The budget announcement emphasized the creation of a substantial ₹1 lakh crore financing pool aimed at fostering commercial-scale R and D and innovation led by the private sector.
