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India: Resource Allocation
Country Study > Chapter 6 > Character and Structure of the Economy > Science and Technology > Resource Allocation

RESOURCE ALLOCATION


Central government financial support of research and development -- including subsidies to public-sector industries -- was 75.7 percent of total financial support in FY 1992. State governments provided an additional 9.3 percent. However, even when combined with the private-sector contribution (15.0 percent), research and development expenditures were only just over 0.8 percent of the GDP in FY 1992. Although there was growth in research and development expenditures during the 1980s and early 1990s, the rate of growth was less than the GNP rate of growth during the same period and was a cause of concern for government planners. Moreover, the bulk of government research and development expenditures (80 percent in FY 1992) goes to only five agencies: the Defence Research and Development Organisation (DRDO), the Ministry of Space, the Indian Council of Agricultural Research, the Ministry of Atomic Energy, and CSIR, and to their constituent organizations.

Despite long-term government commitment to research and development, India compares poorly with other major Asian countries. In Japan, for example, nearly 3 percent of GDP goes to research and development; in South Korea and Taiwan, the figure is nearly 2 percent. In India, research and development receives only 0.8 percent of GDP; only China among the major players spends less (0.7 percent). However, India's share of GDP expenditure on research and development has increased slightly: in 1975 it stood at 0.5 percent, in 1980 at 0.6 percent, and in 1985 at 0.8, where it has become static.

Because of the allocation of financial inputs, India has been more successful at promoting security-oriented and large-scale scientific endeavors, such as space and nuclear science programs, than at promoting industrial technology. Part of the latter lack of achievement has been attributed to the limited role of universities in the research and development system. Instead, India has concentrated on government-sponsored specialized institutes and provided minimal funding to university research programs. The low funding level has encouraged university scientists to find jobs in the more liberally funded public-sector national laboratories. Moreover, private industry in India plays a relatively minor role in the science and technology system (15 percent of the total investment compared with Japan's 80 percent and slightly more than 50 percent in the United States). This low level of private-sector investment has been attributed to a number of factors, including the preponderance of trade-oriented rather than technology-oriented industries, protectionist tariffs, and rigid regulation of foreign investment. The largest private-sector research and development expenditures during the FY 1990-FY 1992 period were in the areas of engineering and technology, particularly in the industrial development, transportation, communications, and health services sectors. Nonetheless, they were relatively small expenditures when compared with government and public-sector inputs in the same fields. The key element for Indian industry to benefit from the greater government and public-sector efforts in the 1990s is the ability of the government and public-sector laboratories to develop technologies with broad applications and to transfer these technologies -- as is done by the National Research and Development Corporation -- to private-sector industries able to apply them with maximum efficiency.

India ranks eleventh in the world in its number of active scientific and technical personnel. Including medical personnel, they were estimated at around 188,000 in 1950, 450,000 in 1960, 1.2 million in 1970, 1.8 million in 1980, and 3.8 million in 1990. India's universities, university-level institutions, and colleges have produced more than 200,000 science and technology graduates per year since 1985. Doctorates are awarded each year to about 3,000 people in science, between 500 and 600 in engineering, around 800 in agricultural sciences, and close to 6,000 in medicine. However, in 1990 India had the lowest number of scientific and engineering personnel (3.3) per 10,000 persons in the national labor force of the major Asian nations. For example, Japan, had nearly seventy-five per 10,000, South Korea had more than thirty-seven per 10,000, and China had 5.6 per 10,000.

The quality of higher education in the sciences has not improved as quickly as desired since independence because of the flight of many top scientists from academia to higher-paying jobs in government-funded research laboratories. Foreign aid, aimed at counteracting university faculty shortages, has produced top-rate graduates as intended. However, because of limited job prospects at home, many of the brightest physicians, scientists, and engineers have been attracted by opportunities abroad, particularly in Western nations. Since the early 1990s, this trend has appeared to be changing as more high-technology jobs, especially in fields requiring computer science skills, have begun to open in India as a result of economic liberalization. The "brain bank" network of Indian scientists abroad that was seen as a potential source of talent by some observers in the 1980s has proven to be a valuable resource in the 1990s.

Using imported technology, scientists made major advances in microprocessors during the 1980s that brought the country to only one generation (three to four years) behind international leaders. A sign of how much microcomputer use has developed could be seen in sales: from US$93 million in FY 1983 to US$488 million in FY 1988. Facilitating the use of automation has been a counterpart to the expansion of the data communication field. The development of the "Param 9000" supercomputer prototype, reportedly capable of billions of floating point operations per second, was completed in December 1994 and was announced by the state-owned Centre for Development of Advanced Computing as ready for sale to operational users in March 1995. Earlier Param models, using parallel processing technologies to achieve near-supercomputer performance, were produced in sufficient quantity for export in the early 1990s.

DRDO developed its own parallel processing computer, which was unveiled by Prime Minister Rao in April 1995. Developed by DRDO's Advanced Numerical Research and Analysis Group in Hyderabad, the supercomputer is capable of 1 billion points per second speed and can be used for geophysics, image processing, and molecular modeling.

Data as of September 1995




Last Updated: September 1995


Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for India was first published in 1995. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on Factba.se.

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