• 8 October 2012
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Public funding in life sciences zooms


There has been a steady increase in public investments in the areas of building infrastructure and expanding R&D efforts, mainly in the product development expansion. The approximate budget for biosciences investments is upwards of $650 million
Apart from declaring 2010-20 as the “Decade of Innovations”, the Government of India is currently in the process of formulating a new science, technology and innovation policy. Expected to be released in early 2013, the policy would reiterate the Government's resolve to increase the R&D spending to two percent of the GDP by 2017. With respect to number of publications in scientific journals or number of patents filed and granted, there are some early evidences of improvements in our global competitiveness.

Speaking at an international conference recently, Vayalar Ravi, Minister of Science and Technology, Government of India revealed, “We foresee an opportunity for optimization of investments into R&D when we build on collaborative excellence. Sharing objectives, co-investments and co-generation of values to people through science seem to me as a new paradigm.”

The government agencies have been offering various types of research grants, fellowships through soft loans or equity, to conduct research in various fields of biotechnology and commercialize indigenous biotechnologies. There are three major departments under the Ministry of Science and Technology (S&T), Government of India; each with its own mandate and funding programs. These include the Department of Science and Technology (DST), the Department of Biotechnology (DBT) and the Department of Scientific and Industrial Research (DSIR). Besides that Indian Council for Medical Research (ICMR) and the Council for Scientific and Industrial Research (CSIR) and Indian Council of Agricultural Research (ICAR) play a major role in the promotion of biotechnology in the country.

Over the last five years, there has been an increase (up to 25 percent) in the public funding to promote research, across all the government agencies. The budgetary provision for S&T spending witnessed a 10 percent hike in the recent Budget. During the budget 2011-12, the Ministry for S&T received a total of 5,679 crore. The allocation for DBT, DSIR, and DST was 1400 crore, 1930 crore, and 2349 crore respectively. This amount in the current budget 2012-13 was 1,485crore (DBT), 2013 crore (DSIR) and 2,477 crore for DST.

DBT, which is the nodal agency for promoting biotechnology in the country, has been spending around 1,400 crore each year, to support R&D and innovation. Besides that about 30 percent of the overall funding goes into the public-private partnerships (PPPs). The agency currently operates these major funding schemes:

Funding alloted for different Government agencies
Agency Funding (Rs in crore)
2011-12 2012-13
DBT 1400.00 1485.00
DST 2349.00 2477.00
ICMR 621.85 700.00
ICAR 2800.00 3000.00
DSIR 1930.00 2013.00


Small Business Innovation Research Initiative (SBIRI), a scheme to promote R&D in small and medium size biotech companies, as of 2012 has assisted more than 112 companies through 19 batches. An estimated amount of 500 crore has so far been spent under this scheme.

Biotechnology Industry Partnership Program (BIPP), envisaged as a government partnership program with industries for support on cost sharing basis for high risk discovery and innovation, accelerated technology development. The scheme provides for a government contribution of 30-50 percent. It supports the industry in discovery linked innovation with a grant-in-aid up to 50 lakh.

In order to promote and nurture innovative research in biotech enterprises, especially the start-ups and SMEs, the government incorporated Biotechnology Industry Research Assistance Council (BIRAC) as a not-for-profit section 25 company in March this year. Apart from operational cost with an initial outlay of 70 crore, BIRAC will have an additional 150 crore to invest in the public private partnership initiatives. BIRAC's Biotechnology Ignition Grant (BIG) scheme for igniting new ideas was declared open on June, 2012. The scheme is designed to stimulate commercialization of research discoveries by providing very early-stage grants for the development and maturation of those discoveries into marketable product or intellectual property (IP), in particular to help bridge the gap between discovery and invention. Funding will be in the form of grant-in-aid limited up to 50 lakh and the period for the study would generally not exceed 18 months.

According to Dr Renu Swarup, managing director, BIRAC, “Our mandate is to take discovery forward and encourage product development by indigenous biotechnological companies. We definitely need to instill confidence in the new comers in the industry. We can see more and more people coming forward.”

Department of Science and Technology (DST) has a dedicated Drugs and Pharmaceutical Research Program (DPRP) and has forged 101 collaborative projects so far. However the budgetary allocation has come down sharply in the recent years. The allocation was 60 crore and it was revised drastically to 50 crore during the year 2011-12. It was slashed further to 40 crore in 2012. The annual funding by the agency to the various schemes and fellowship programs is more than 2,000 crore. Last year, the contribution towards biopharma has been close to 600 crore. Fund for Infrastructure Strengthening of Science and Technology (FIST) is another successful ongoing scheme of the DST.

Dr T Ramasami, secretary, DST said, “The DST has funded close to 200 life sciences research projects and 29 percent of the same are related to biotechnology under different schemes. Bharat Biotech received a funding of 32 lakh as loan from the Technology Development Board, which has resulted in development of a product having a price of $1 per a dose.”

Council of Scientific and Industrial Research (CSIR), India's largest Research and Development (R&D) organization, with 39 laboratories and 50 field stations or extension centers spread across the nation, has a budget allocation of 1,750 crore for 2012-13.

CSIR provides grant support to the institutions and organizations at low interest loans (3-5 percent) under the New Millennium Indian Technology Leadership Initiative (NMLTI). It has enhanced its budget allocation of 11.79 crore by adding 15 crore, thereby allowing the program to spend about 26.79 crore up to 2017.

The Department of Health Research, which comes under the Ministry of Health and Family Welfare and headed by the director general of ICMR, an apex body for the formulation, coordination and promotion of biomedical research, has a total budget provision of 660 crore in 2012-13 as against 588.26 crore in 2011-2012. In 2012-13, ICMR got 700 crore which is 88.15 crore more in comparison to the allocation of 621.85 in 2011-12.

According to Dr V M Katoch, director general, ICMR, “During the 10th Five Year Plan period there was a impetus given by the ICMR in developing infrastructure for conduct of fundamental and strategic research. This has resulted in the conduct of research which has provided encouraging leads for development of new products. In the 11th Plan, efforts are being made to pursue the leads for product development.

The list of programs which have the potential to be translated into the National Health Care Program/Clinical Practice were obtained from the Directors of the Institutes.”

The Indian Council of Agricultural Research (ICAR), an autonomous organization under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture, overseas the agricultural research with a special focus on agri biotechnology. Compared to 2, 300 crore budget in 2010-11, the agency had 2,800 crore planned budget for the year 2011-12. Out of that, close to 1,000 crore was spent on the projects focused on biotechnological applications in livestock, crop improvement and field trials. It spends about 800 crore annually on various biotechnology-related research projects.

Recently the Union Cabinet has approved a proposal of the Ministry of Agriculture for the establishment of an Indian Institute of Agricultural Biotechnology (IIAB) in Ranchi, Jharkhand. The institute will be set up at a cost of approximately 287.50 crore during the 12th Five Year Plan.

The Department of Pharmaceuticals (DoP) has planned to set up a 10,000 crore venture capital fund to provide much-needed financial assistance to the players. The DoP will contribute 15 percent of this as the corpus. This is a public-private-partnership model and the rest of the funds would be raised from other interested investors. The funds would be raised in three phases-3,000 crore in 2011-12, 5,000 crore by 2013 and 2,000 crore by 2015. The complete fund would be utilized by 2015. The plan is to provide financing for new drug discovery projects and for biopharmaceutical products in the country.

Ramasami “The DST has funded close to 200 life sciences research projects and 29 percent of the same are related to biotechnology under different schemes”

- Dr T Ramasami,
secretary, DST

Dsc0022 “Our mandate is to take discovery forward and encourage product development by indigenous biotechnological companies. We definitely need to instill confidence in the new comers in the industry. We can see more and more people coming forward”

- Dr Renu Swarup,
MD, BIRAC
Ashwinraguramanisvicepresident “The upsurge is encouraging and, with right enablers, it can lead to a whole new breed of companies that will emerge from India”

- Ashwin Raguraman,
vice president, India Innovation Fund
Sanjivkaulmanagingdirector “ChrysCapital, that made two investments in less than 12 months, believes in the Indian life sciences story and will continue to make investments”

- Sanjiv Kaul,
managing director, ChrysCapital Advisors
Drkumarshiralagi “We are backing a top notch scientific team assembled in India that is leveraging leading-edge platform technology to develop promising products to address the $20 billion global dermatology market”

- Dr Kumar Shiralagi,
MD, IUVP
Mrnitindeshmukh “Direct equity, fully convertible shares or loans, conditional loans and mezzanine funding are most preferred instruments of investments in biosciences starts ups”

- Nitin Deshmukh,
CEO, Kotak Private Equity Group


Major Initiatives
  • Outlay for DST in 2012-13 is 2,252 crore. About 35 percent of this will be spent on life sciences.
  • Provision for DBT is 1,485 crore in 2012-13 Nearly 40 percent of this will be devoted to R&D
  • ICAR allocated 3000 crore. One-third of this is to be spent on agriculture biotechnology related research and infrastructure.
  • ICMR has an allocation of 700 crore and will be spent approximately 350 crore on biomedical and diagnostic research for various diseases.
  • The plan outlay for DSIR is 2,013 crore, including grants-in-aid of 1,898 crore for CSIR. Out of that 400 crore is expected to be spent on biotechnology related research and infrastructure.
Rahul Koul

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