RDI scheme should fund firms that can deepen R&D, have absorptive capacity

The RDI Scheme should fund firms with adequate absorptive capacity - but which firms and how will be key

The Research, Development and Innovation (RDI) Scheme has been cleared by the Cabinet. The scheme allocates ₹1 trillion (or $12 billion) to funding R&D in Indian industry. Of this, ₹20,000 crore is in this year’s budget. Initial comments on how the funds will flow suggest that much of it will be provided in the form of low- or zero-interest loans to a mix of funds of funds and directly to firms. My eyes glaze over in incomprehension when I hear the phrase “fund of funds” — I just do not know how they will be held accountable for directly enhancing