Union Cabinet Approves ₹1 Trillion RDI Scheme to Boost Tech Innovation

The Union Cabinet has given the green light to a ₹1 trillion Research Development and Innovation (RDI) Scheme, aimed at providing long-term financing to strategic and sunrise sectors. This ambitious initiative, announced in the July Budget last year, is designed to spur private sector investment in research and development (RDI) through a two-tiered structure.

The scope of the scheme encompasses a wide range of sectors, including energy security and transition, quantum computing, robotics, biotechnology, and artificial intelligence. The primary goal is to provide long-term financing or refinancing with long tenors at low or nil interest rates.

The flow of funds will be facilitated through a grant of 50-year interest-free loans to the Anusandhan National Research Foundation (ANRF), chaired by the Prime Minister. ANRF will then extend long-term concessional loans to second-level fund managers such as Alternative Investment Funds, Development Finance Institutions, and Non-Banking Financial Companies.

These second-level fund managers will finance individual projects, including the establishment of a Deep-Tech Fund of Funds, financing transformative projects at higher levels of technology, and supporting the acquisition of critical technologies of high strategic importance.

Economist N R Bhanumurthy emphasized the importance of funding innovation, noting that globally, governments in countries like the US have financed the National Science Fund. The Department of Science and Technology (DST) will serve as the nodal department for implementing the scheme.

The Governing Board of ANRF will provide overarching strategic direction to the RDI Scheme, and its Executive Council will recommend guidelines for the scheme and second-level fund managers, along with the scope and type of projects in sunrise sectors.

By addressing the critical need for long-term, affordable financing, the RDI Scheme aims to foster self-reliance and global competitiveness, facilitating a conducive innovation ecosystem for the country as it moves towards achieving Viksit Bharat by 2047.

The focus of the scheme includes the digital economy, such as digital agriculture, and technologies required for strategic reasons, economic security, self-reliance, and public interest. It will support artificial intelligence and its application to India-specific challenges in agriculture, health, and education.

The government's press statement highlighted that the scheme is designed to overcome the constraints and challenges in funding the private sector, providing growth and risk capital to sunrise and strategic sectors to facilitate innovation, promote technology adoption, and enhance competitiveness.

Changes to the scheme, sectors, or types of projects, as well as second-level fund managers, will be approved by an Empowered Group of Secretaries led by the Cabinet Secretary.