Asia-Pacific National Innovation Systems
Online Resource Centre

Financing Innovation And Technology Development


Printer Friendly and PDF

This is one of the major support measures provided by the Government for enhancing innovation and technology development. There are a very large number of schemes operated by different Ministries / Departments of Government, Financial Institutions and others. These are intended for all categories of units- large, small and medium and even individuals and in various sectors. It is for a unit to choose which one suits it the best. A few important ones are mentioned below:

Technology Development Board (TDB)
The Board, with the support of DST, administers a fund called Fund for Technology Development and Application. It was constituted under the provisions of the Technology Development Board Act 1995. It provides equity capital, loan on soft terms and other financial assistance to innovative research and development projects. The assistance is available to manufacturing units (including SMEs) in public and private sectors, R&D organizations, academic institutions and others. The range of projects that can be funded, who can be funded and what activities can be funded are very wide. The Board has till the end of 2005-06 supported 156 projects with a total cost of US$ 115 million. (Around Rs. 560 corers)

Science and Engineering Research Council (SERC)
This programme operated by DST provides financial support to basic research across various disciplines. The focus has been in promoting the basic and applied research in frontline areas of engineering and technology. Under the Scheme, various academic and research institutes work in collaboration with industry and user agencies and transfer such technologies for development activities. R&D projects in areas like physical and chemical sciences, life sciences, energy and others have been supported.

Pharmaceutical Research and Development Fund (PRDSF) Programme
Under this Programme operated by Drug Development Promotion Board under the DST, financial support is given to R&D Projects in drugs and pharmaceuticals sector. These projects are proposed for funding by industry, academic institutes and R&D laboratories. Support is also provided for creation of state-of-the-art facilities in this area.

Instrumentation Development Programme (IDP)
Under this programme operated by DST, funds are provided to innovative design and development projects. The projects for support are received from academic institutes and R&D laboratories. A number of technologies developed have been transferred to industry.

Technology Development and Promotion Programme
The programme supported by DSIR aims at catalyzing and supporting activities relating to technology absorption, adaptation and demonstration including capital goods development by involving industry and R&D organizations. The specific objectives of the programme are (a) supporting industry for technology development, demonstration and absorption of imported technologies (b) building indigenous capabilities for development and commercialization of contemporary products and processes of high impact (c) involvement of national research organizations in joint projects with industry and (d) technology evaluation in selected sectors. Till 2005, the DSIR has supported 166 projects involving various disciplines such as metallurgy, electrical, electronics, instrumentation, mechanical engineering and others.

Technopreneur Promotion Programme (TePP)
This is a novel programme jointly operated by the DSIR and TIFAC to tap the vast innovative potential of the citizens of India. It is a mechanism to promote individual innovators to become technology-based entrepreneurs. The main objectives of the scheme are to promote and support untapped creativity of individual innovators, to assist them to become technology based entrepreneurs and help them in networking and forging linkages with other constituents of the innovation chain for commercialization of their developments. Assistance in the form of grant up to a maximum of US$ 22,000 (Rs.1 million) to cover expenditure on R&D, procurement of small tools and raw materials, fabrication etc. Till 2005, 122 innovative projects have been supported and many have been commercially successful.

Homegrown Technology (HGT)
The Technology Information, Forecasting & Assessment Council (TIFAC), is operating this scheme. Its objective is to promote the commercialization of home grown technologies, and to assist in their scaling up from a pilot-scale to full production. The scheme provides partial financial assistance and techno-managerial inputs through project monitoring committees. There is active participation of industry and academia. From the initiation of the scheme in 1992-93, till 2005-06, it has supported 77 projects, out of which 60 have been completed and the remaining are in different phases of completion.

New Millennium India Technology Leadership Initiative (NIMITLI)
Considering the importance of innovation in national development, the Government launched a new initiative - New Millennium India Technology Leadership Initiative (NIMITLI) – in the year 2000. The Council of Scientific and Industrial Research (CSIR) is operating the scheme. The basic objective is to catalyze innovation centered scientific and technological developments as a vehicle to attain, for India, a global leadership position, in selected niche areas in a true ‘Team India’ spirit and synergise the best competencies of publicly funded R&D institutions, academia and private industry. It is the largest public-private partnership within the R&D domain in the country. It has carved out a unique niche in the innovation space and enjoys an excellent reputation. In the six years of its existence (up to 2005) the programme has evolved 42 projects covering diverse areas involving 287 partners (222 in the public sector and 65 in the private sector) with an estimated outlay of around US$ 70 million. The projects are setting new global paradigms in the areas such as nano material catalysis, biotechnology, bio-informatics, industrial chemicals, gene-based new targets for advanced drug delivery systems, low cost office computers, improved liquid crystal devices and others.

Small Business Innovation Research Initiative (SBIRI)
The distinctive feature of the scheme operated by DBT is that it supports novel high-risk pre-proof-of-concept research and late stage development in small and medium enterprises led by innovators with science backgrounds and to get them involved in development of such products and processes which have high societal relevance. The Scheme operates in two Phases. Under Phase I, highly innovative early stage, pre-proof-of-concept research is supported and under Phase II, the funding is provided for late development and commercialization of innovative research leads. Projects wherein proof-of-concept is already established and available with R&D institution or R&D unit of the industry could directly avail the Phase II support. Emphasis is on nurturing and mentoring innovative and emerging technologies/entrepreneurs, and to assist new enterprises to forge appropriate linkages with academia and government. Under this Scheme, it proposes to set up ‘Center for Idea Generation’ which would be involved in idea generation for innovation and preparing pre-proof of concepts.

Collaborative Industrial R&D Ventures
The Department of Science and Technology, under bilateral framework, provides financial support to collaborative industrial R&D ventures between Indian and Israeli companies. Financial support up to 50% of the R&D expenditure, not exceeding an amount equivalent to US$ 500,000 (Total for Indian and Israeli partners) may be considered. The focus is on projects in biotechnology, nanotechnology, space science and technology, water management and non-conventional energy sources. Other areas are also considered.

Environmental Research Programme
The Ministry of Environment and Forests has a Scheme ‘Environmental Research (ER)’ for promotion of research in multidisciplinary aspects of environmental protection, conservation and development. Research grants are provided in the identified thrust areas, to various institutions/universities and non-governmental organizations all over the country. The following are the main programmes:
Environment Research Programme – Brown Agenda
Ecosystem Research Programme – Green Agenda
The Ministry has set up 9 Centers of Excellence with a view to strengthen awareness, research and training in priority areas of environmental science and management e.g. Center of Environment Education, Center for Ecological Sciences and others.

Financial support by other Ministries/Departments/Organizations

Department of Biotechnology
The Department has a large number of programmes to support innovation and R&D in the area of biotechnology. It inter-alia provides programme-based support to outstanding research groups in Universities and Institutions for strengthening the ongoing activities by providing equipment and seed money for undertaking research in various areas of biodiversity. It also supports basic research in modern biology. Mission mode programmes in bio-energy, bio-fuels vaccines, drugs and diagnostics are also supported.

Department of Information Technology

  • The DIT has set up Technology Development Council (TDC) to facilitate research and development in IT, promote Free and Open Source software and to promote applications of IT for indigenous, efficient and cost effective solutions for product and process development in the industrial sectors. Bioinformatics is also supported by the TDC.
  • Under the Scheme ‘Innovation promotion in IT’, the DIT provides support to specified institutions to promote start up companies with their active partnership. As a result several startup companies have come up.
  • An important initiative of the DIT has been setting up of National Mission on Power Electronics Technology (NaMPET) which involves academic institutions, industry and C-DAC (Center for Development of Advanced Computing) which also acts as a Nodal Center. This is financially supported by the DIT.
  • The DIT is supporting R&D in convergence communication and broadband technologies. This is an important area as convergence of computer, communication, consumer electronics, broadcasting and contents; voice, data, video and computing, fixed and mobile telephony; and telecommunication and IT networks is creating new business giving flexibility in doing business and taking collaborative processes to a new level.
  • The DIT as a facilitator has taken initiatives for development of telemedicine technology. Also, the Department is now giving enhanced focus to Bioinformatics that has been identified as emerging area. It is setting up Centers of Excellence for Research and Training in 4 institutions to undertake R&D and to develop human resource and faculty in bioinformatics.

Ministry of Small Scale Industries has a number of schemes of financial support to small-scale units. There is a Scheme of Credit Linked Capital Subsidy to facilitate technology up gradation in to these units. Under another Scheme, units are reimbursed expenditure involved in getting ISO 9000/ISO 14001 Certification

Ministry of Non-conventional Energy Sources
supports R&D for technology development and manpower development in renewable energy areas. R&D projects could be submitted in any one of the modes (a) an industrial unit registered with the DSIR (b) a consortium of industry, academic institutions, research laboratories and R&D institutions etc. may be formed to undertake a R&D project and (c) an industry may join hands with the Ministry to entrust a R&D project to an R&D institution /research laboratory or an academic institution. The thrust areas identified by the Ministry are solar energy, energy from urban and industrial waste etc. The Ministry supports up to 50% of the R&D project cost.

Ministry of Food Processing Industries
For modernization of food processing industry, technology up gradation of units etc, the Ministry provides financial assistance to the extent of 25% to 33.33% of project cost.

Department of Industrial Policy and Promotion
has a comprehensive scheme for modernization and technology up gradation of all segments of leather industry. Under the scheme, assistance is available in the form of investment grant up to a maximum of 30% of the investment to small-scale units and 20% to non-small scale units, with a specified ceiling in monetary terms.

Ministry of Steel
Financial assistance is provided to R&D projects for technology up gradation, innovativeness, improvement in energy efficiency and other aspects relating to iron and steel industry. It is also providing financial support to SMEs operating in the steel re-rolling sector. A Technology Information Resource and Facilitation Center has been planned to provide long term sustainability to the sector through research, technology development and demonstration, design and business support facilities.

National Innovation Foundation
It supports scouting, spawning, sustaining and scaling up of grassroots green innovations and links innovation, enterprises and investments.

Small Industries Development Bank of India (SIDBI)
The bank provides finance and other support systems for modernization and up gradation of small-scale units.

Case Studies