In a significant policy push to strengthen India's innovation ecosystem, the Union Cabinet on Tuesday approved a Rs 1 lakh crore Research Development and Innovation (RDI) Scheme to promote research, innovation and private sector participation in strategic and emerging sectors.

Information and Broadcasting Minister Ashwini Vaishnaw said the scheme recognises the vital role of the private sector in driving innovation and aims to provide long-tenure loans at low or zero interest to encourage investment in high-tech and deep-tech areas.

By representing an array for funding particular projects, the RDI Scheme intends to remove the existing funding bottlenecks faced by private actors, mainly startups and tech companies, by providing capital for growth and risk to sunrise and strategic sectors. 

Other key activities funded under the scheme are those providing capital for transformative projects with a high level of Technology Readiness Level (TRL) and those supporting the acquisition of extremely critical or highly strategic-level technologies.

A key feature is the creation of a Deep-Tech Fund of Funds that will channel financial resources into technology-driven ventures. The scheme also envisages support for equity-based financing, particularly for startups.

The scheme will operate through a two-tiered funding mechanism. At the top level, a Special Purpose Fund (SPF) will be created under the Anusandhan National Research Foundation (ANRF) to act as the fund custodian. This SPF will disburse funds to second-level fund managers, who in turn will provide long-term concessional loans or equity support to R&D projects.

The ANRF Governing Board, chaired by the Prime Minister, will provide the strategic vision for the scheme. The Executive Council of ANRF will oversee project scopes and sectoral focus. Meanwhile, an Empowered Group of Secretaries (EGoS), led by the Cabinet Secretary, will review the scheme's progress and approve necessary changes.

The Department of Science and Technology (DST) will serve as the nodal implementing agency.

Designed to support the vision of a developed India by 2047, the RDI Scheme aims to build a vibrant innovation ecosystem that is globally competitive and self-reliant. The official release noted that affordable, long-term funding for private sector R&D is crucial to realising India’s ambition of becoming a technology-driven economy.