Pratidin
Science and technology30 September 2026Indian Express, Page 1GS3GS2

₹1 lakh crore RDI Fund for deep tech pauses new applications as funds run short

India's flagship fund to pull private money into research has stalled after one round. What went wrong?

Published 30 September 2026. Written by Pratidin from the reports linked at the end; every fact checked by a separate review before publishing. How we work

The Indian Express reported on 30 September 2026 that the Research, Development and Innovation (RDI) Fund, the government's ₹1 lakh crore scheme to finance private-sector research in deep-tech areas, has paused new applications. The Technology Development Board (TDB), one of the fund's managers, issued a notice citing 'administrative reasons' for not accepting applications after this month. According to the report, the TDB had received ₹2,000 crore, which was used up in the first round, in which about ₹2,192 crore in soft loans was approved for 22 companies. Thirteen more companies selected in a second round are still awaiting letters of intent, out of more than 300 applications received.

The Union Cabinet approved the RDI scheme on 1 July 2025, and Prime Minister Narendra Modi launched the fund on 3 November 2025 at the Emerging Science, Technology and Innovation Conclave (ESTIC) in New Delhi. It is designed in two tiers. A Special Purpose Fund within the Anusandhan National Research Foundation (ANRF) acts as custodian, and it passes money to Second Level Fund Managers, who lend or invest in companies. The fund offers long-term loans at low or nil interest, equity, and contributions to a deep-tech fund of funds; it does not give grants. It targets projects at higher technology readiness levels in sunrise and strategic sectors. The Department of Science and Technology is the nodal department.

The report lists several bottlenecks: the Department of Science and Technology has not released further money to the TDB; the appointment of private-sector fund managers, whose applications closed in January 2026, is still pending; and the Biotechnology Industry Research Assistance Council (BIRAC), the other public fund manager, faces unresolved tax questions over converting loans into equity. The fund has also faced scrutiny after a report in August 2026 found that 15 of the 22 first-round beneficiaries had investment links with members of the selection committee; members said they had recused themselves. Supporters of the scheme see it as essential to raise private R&D; critics say slow disbursal and governance doubts risk its goals.

Practise this in the app: flashcards, quiz and a timed answer
Prelims

Prelims facts

  • The RDI scheme, approved by the Cabinet on 1 July 2025 with a ₹1 lakh crore corpus, was launched by the PM on 3 November 2025 at ESTIC.
  • It has two tiers: a Special Purpose Fund in the ANRF and Second Level Fund Managers such as TDB and BIRAC.
  • It gives long-term low or nil interest loans, equity and fund-of-funds contributions, not grants.
  • In September 2026 the TDB paused new applications citing 'administrative reasons' after its ₹2,000 crore was used up in the first round.
  • An August 2026 report found 15 of 22 first-round beneficiaries had investment links with selection committee members.

Quick recall

Corpus of the RDI Fund?
₹1 lakh crore.
When did the Cabinet approve the RDI scheme?
1 July 2025.
When and where was the RDI Fund launched?
3 November 2025, by the PM at the Emerging Science, Technology and Innovation Conclave (ESTIC) in New Delhi.
Where is the first-tier Special Purpose Fund of the RDI scheme housed?
In the Anusandhan National Research Foundation (ANRF).
Two public Second Level Fund Managers of the RDI Fund?
Technology Development Board (TDB) and Biotechnology Industry Research Assistance Council (BIRAC).
Instruments offered by the RDI Fund?
Long-term low or nil interest loans, equity, and contributions to a deep-tech fund of funds; no grants.
Who chairs the ANRF Governing Board?
The Prime Minister.
What did the TDB cite when pausing RDI applications in September 2026?
'Administrative reasons'; reports linked it to lack of funds.

Prelims practice question

With reference to the Research, Development and Innovation (RDI) scheme, consider the following statements:
1. A Special Purpose Fund set up within the Anusandhan National Research Foundation acts as the custodian of the fund.
2. It primarily provides grants to university researchers for basic research.
3. The Department of Science and Technology is its nodal department.
Which of the statements given above are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
Show answer

Answer: (c) 1 and 3 only. Statements 1 and 3 are correct. Statement 2 is wrong: the fund offers long-term low or nil interest loans, equity and fund-of-funds contributions to support private-sector R&D at higher technology readiness levels; it does not give grants.

Use this in UPSC Mains: previous-year questions

Recurring theme: Private R&D, deep-tech financing and indigenisation of technology

  1. 2026 · GS3 · 15 marksCovers one partUse it in the body

    How are startups in India promoting entrepreneurship, innovation and employment? Discuss the global and domestic challenges in their working and suggest suitable measures to overcome these challenges.

    How to use this

    Use the RDI Fund to show how the state is trying to finance deep-tech startups with patient capital, and the domestic implementation and governance hurdles that slow it.

    • The ₹1 lakh crore RDI Fund (Cabinet approval 1 July 2025, launched 3 November 2025) gives low or nil interest long-term loans, equity and fund-of-funds money, not grants, for higher technology readiness levels.
    • In September 2026 the TDB paused new applications after its ₹2,000 crore was used up in round one (about ₹2,192 crore approved for 22 firms); over 300 applications were received.
    • An August 2026 report found 15 of 22 first-round beneficiaries had investment links with selection committee members; fixes include a multi-year release schedule and public disclosure of beneficiaries.
  2. 2014 · GS3 · 12.5 marksCovers one partUse it in the conclusion

    Scientific research in Indian universities is declining, because a career in science is not as attractive as business professions, engineering or administration, and the universities are becoming consumer-oriented. Critically comment.

    How to use this

    Use it in the conclusion to note that recent reform aims to widen India's research base beyond government, while showing that money flow and governance still constrain it.

    • India's research spending has long been led by government, with private firms contributing a small share; the ₹1 lakh crore RDI Fund, routed through the Anusandhan National Research Foundation, targets private deep-tech R&D.
    • Its September 2026 pause, after the TDB's ₹2,000 crore ran out in one round, shows research funding needs assured multi-year releases to be credible.

Mains practice question

India's private sector spends little on research and development. Discuss how the RDI Fund seeks to address this, and examine the implementation and governance challenges it faces. (250 words)

Model answer

India's research spending has long been led by government, with private firms contributing a small share. The ₹1 lakh crore RDI Fund, launched in November 2025, aims to channel patient capital into private deep-tech R&D, but in September 2026 it paused new applications for want of funds.

How the fund is designed

  • Two tiers: a Special Purpose Fund in the Anusandhan National Research Foundation (ANRF) passes money to Second Level Fund Managers (TDB, BIRAC and planned private managers).
  • Instruments: long-term low or nil interest loans, equity and a deep-tech fund of funds; no grants.
  • Focus: higher technology readiness levels in sunrise and strategic sectors, bridging the gap between lab and market.
  • Governance: ANRF Governing Board chaired by the PM; an Empowered Group of Secretaries under the Cabinet Secretary approves fund managers and sectors.

Implementation challenges

  • Funding flow: TDB's ₹2,000 crore ran out after the first round; further releases are pending.
  • Slow scale-up: private fund managers not yet appointed months after applications closed.
  • Tax and legal issues: BIRAC faces uncertainty on loan-to-equity conversion.

Governance concerns

  • Conflict of interest: 15 of 22 first-round beneficiaries had investment links with selection committee members.
  • Need for transparent criteria and independent oversight to retain investor trust.

Way forward

  • Assured multi-year release schedule from DST.
  • Quick appointment of professional private fund managers with clear conflict rules.
  • Public disclosure of beneficiaries and outcomes.
  • Clarify tax treatment of conversions.

The RDI Fund's design is sound; its credibility now depends on steady money and clean governance.

The basics

Why this matters

New technologies like quantum computing, space systems, robotics and advanced materials take years and large sums to move from a lab prototype to a product. Banks rarely lend against unproven technology, and venture capital prefers quicker returns. The RDI Fund was designed to fill this gap with patient, cheap capital. Its stall shows how design and delivery can diverge.

The valley of death

Engineers describe a technology's maturity on the Technology readiness levels scale from 1 (basic principles observed) to 9 (proven in operation). Public research grants usually stop at the early levels. The middle, where a working prototype must be scaled and tested, is often called the valley of death because funding dries up.

The RDI Fund lending to deep-tech firms at middle and higher readiness levels
is like
A bridge loan that carries a traveller across a river the ferry does not serve
Grants carry ideas to the lab stage and markets fund mature products, but the crossing in between has little finance.

How the money is meant to flow

Structure of the RDI scheme
  1. 1ANRF Governing BoardChaired by the Prime Minister; gives strategic direction
  2. 2Empowered Group of SecretariesLed by the Cabinet Secretary; approves sectors, fund managers and changes
  3. 3Special Purpose Fund in ANRFFirst tier; custodian of the money
  4. 4Second Level Fund ManagersTDB, BIRAC and planned private managers; lend to or invest in companies
  5. 5Department of Science and TechnologyNodal department

The first tier sits in the Anusandhan National Research Foundation. The second tier includes the Technology Development Board.

From approval to pause

The RDI Fund so far
  1. 1 July 2025Union Cabinet approves the scheme with a ₹1 lakh crore corpus
  2. 3 November 2025PM launches the fund at ESTIC in New Delhi
  3. First roundAbout ₹2,192 crore in soft loans approved for 22 companies
  4. August 2026A press report finds that 15 of the 22 beneficiaries had links to selection committee members
  5. September 2026TDB pauses new applications, citing administrative reasons

The governance lesson

When public money is managed by expert committees drawn from the investment industry, Conflict of interest in public funds becomes a central risk. Disclosure and recusal rules only work if they are visible and verified.

Go deeper

In one line: The RDI Fund, meant to pour ₹1 lakh crore of cheap, long-term capital into private deep-tech research, has paused new applications after its first round used up the money given to one of its fund managers.

Why it matters for UPSC

GS3 asks about indigenisation of technology, R&D spending and startups; GS2 asks about scheme design and governance. The RDI Fund is a live example of both.

The core idea

The fund sits in the Anusandhan National Research Foundation and works through managers such as the Technology Development Board. It funds projects at higher Technology readiness levels, using loans and equity instead of grants. Its early troubles combine funding delays with questions of Conflict of interest in public funds.

Numbers and dates to remember

  • 1 July 2025: Cabinet approval; ₹1 lakh crore corpus.
  • 3 November 2025: launch at ESTIC.
  • First round: about ₹2,192 crore approved for 22 companies; 15 had links to selection committee members.
  • TDB received ₹2,000 crore; second round of 13 companies awaits letters of intent.

Where to go next

Go deeper: can the state build a deep-tech financier?

The case for the fund. Private companies in India spend little on research compared with leading economies, and deep-tech startups struggle to raise long-horizon money. Concessional loans and equity at higher Technology readiness levels can crowd in private capital rather than replace it. Using the Anusandhan National Research Foundation as the anchor links the fund with the national research strategy.

Delivery problems. A fund-of-managers model depends on money reaching the managers on time. The Technology Development Board exhausted its allocation in one round. Private fund managers, meant to scale disbursal, have not been appointed. BIRAC's tax questions on loan-to-equity conversion show how legal details can hold up money.

Governance problems. Expert committees drawn from venture capital bring know-how but also portfolio links. The finding that 15 of 22 first-round beneficiaries were linked to committee members is a textbook case of Conflict of interest in public funds. Recusal is a minimum; public disclosure of interests and outcomes, and independent audit, build trust.

What to watch. Whether DST releases further funds, how quickly private managers are appointed, and whether conflict rules are tightened.

Anusandhan National Research Foundation

The statutory research funder that houses the RDI Fund.

In one line: ANRF is a statutory body set up under the Anusandhan National Research Foundation Act, 2023 to fund and steer research across science, engineering, social sciences and humanities.

Structure

Its Governing Board is chaired by the Prime Minister, and an Executive Council handles day-to-day decisions. The Department of Science and Technology is its administrative department. The 2023 Act subsumed the Science and Engineering Research Board (SERB).

Role in the RDI scheme

The RDI scheme's first tier, a Special Purpose Fund, is housed within ANRF and acts as custodian of the ₹1 lakh crore corpus. ANRF's Executive Council approves guidelines and recommends fund managers, while an Empowered Group of Secretaries under the Cabinet Secretary approves them.

Why it is in the news

The fund it houses has paused new applications because money has not reached a key fund manager.

Where to go next

Technology Development Board

The statutory body that manages RDI money and paused applications.

In one line: The TDB is a statutory body under the Department of Science and Technology that finances Indian companies to commercialise indigenous or imported technologies.

What it does

The TDB was created under the Technology Development Board Act, 1995. It gives soft loans, equity and occasionally grants to firms bringing new technologies to market. This lending experience is why it was chosen as one of the first Second Level Fund Managers of the RDI Fund, alongside BIRAC, which does similar work for biotechnology startups.

Why it is in the news

According to the Indian Express, the TDB received ₹2,000 crore for the RDI Fund, which was used up in the first round, and in September 2026 it stopped accepting new applications, citing administrative reasons.

Where to go next

Technology readiness levels

The 1 to 9 scale used to judge how close a technology is to market.

In one line: Technology readiness levels (TRLs) rate a technology's maturity on a scale from 1, basic principles observed, to 9, a system proven in operation.

The scale in brief

  • TRL 1 to 3: basic research and proof of concept.
  • TRL 4 to 6: validation in the laboratory, then a prototype demonstrated in a relevant environment.
  • TRL 7 to 9: system prototype in an operational environment, completed system, and proven operation.

The scale was developed by NASA and is now used widely by governments and investors.

Why it matters for funding

Grants usually support low TRLs. Markets fund high TRLs once products sell. The middle, where costs rise and risks remain, is the hardest to finance. The RDI scheme explicitly targets projects at higher TRLs, using loans and equity that can be repaid or earn a return.

Where to go next

Conflict of interest in public funds

The ethics issue raised by the RDI Fund's first round.

In one line: A conflict of interest arises when a person deciding on public money has a private interest that could influence, or appear to influence, that decision.

Why it matters

Public trust depends not only on actual fairness but on visible fairness. Even if committee members recuse themselves, a pattern of linked beneficiaries raises doubts. This is a GS4 theme on probity and a GS2 theme on transparency and accountability.

Tools to manage it

Mandatory declaration of interests, recusal from related decisions, independent members, public disclosure of beneficiaries and decisions, and audit by bodies such as the CAG.

Why it is in the news

A report in August 2026 found that 15 of the 22 companies in the RDI Fund's first round had investment links with members of the selection committee. Members said they had recused themselves from those decisions.

Where to go next

Prelims-style quiz

  1. Consider the following statements about the RDI scheme:
    1. It was approved by the Union Cabinet in July 2025.
    2. Its corpus is ₹1 lakh crore.
    3. It is administered by NITI Aayog.
    How many of the statements given above are correct?

    1. Only one
    2. Only two
    3. All three
    4. None
    Show answer

    Answer: (b) Only two. Statements 1 and 2 are correct. Statement 3 is wrong: the fund sits with the Anusandhan National Research Foundation and the Department of Science and Technology is the nodal department.

  2. Consider the following statements about the governance of the RDI scheme:
    1. The ANRF Governing Board, chaired by the Prime Minister, provides strategic direction.
    2. An Empowered Group of Secretaries led by the Cabinet Secretary approves sectors and fund managers.
    3. Second Level Fund Managers pass money from the companies back to the ANRF.
    4. The scheme targets projects at higher technology readiness levels.
    How many of the statements given above are correct?

    1. Only one
    2. Only two
    3. Only three
    4. All four
    Show answer

    Answer: (c) Only three. Statements 1, 2 and 4 are correct. Statement 3 reverses the flow: Second Level Fund Managers receive money from the Special Purpose Fund and lend to or invest in companies.

  3. Consider the following statements:
    Statement-I: The RDI Fund offers long-term loans and equity rather than grants.
    Statement-II: The fund is meant to finance projects at higher technology readiness levels that are closer to commercial use.
    Which one of the following is correct in respect of the above statements?

    1. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    2. Both Statement-I and Statement-II are correct and Statement-II does not explain Statement-I
    3. Statement-I is correct but Statement-II is incorrect
    4. Statement-I is incorrect but Statement-II is correct
    Show answer

    Answer: (a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I. Both are correct and Statement-II explains Statement-I: projects near commercialisation can be expected to repay loans or give equity returns, so the fund uses returnable capital rather than grants.

  4. On the Technology Readiness Level (TRL) scale, which level indicates that a technology has been proven in its operational environment?

    1. TRL 1
    2. TRL 4
    3. TRL 6
    4. TRL 9
    Show answer

    Answer: (d) TRL 9. TRL 9 is the highest level: the actual system is proven in operation. TRL 1 is basic principles observed, TRL 4 is validation in a laboratory, and TRL 6 is a prototype demonstrated in a relevant environment.

  5. The Anusandhan National Research Foundation was established under which of the following?

    1. An executive resolution of the Department of Science and Technology
    2. The Anusandhan National Research Foundation Act, 2023
    3. The Science and Engineering Research Board Act, 2008
    4. A notification under the Companies Act, 2013
    Show answer

    Answer: (b) The Anusandhan National Research Foundation Act, 2023. ANRF was set up under the Anusandhan National Research Foundation Act, 2023, which also repealed the Science and Engineering Research Board Act, 2008 and subsumed SERB into ANRF.

Syllabus

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