Why in news?

A Parliamentary Standing Committee has raised concerns over the Government’s plan to allocate ₹20,000 crore as a 50-year interest-free loan to deep tech sectors.

While acknowledging the initiative’s potential to boost research, the committee warned of possible fund misallocation, national security risks, and a low return on investment.

What’s in Today’s Article?

• Deep Tech
• Evolution of India’s Deep Tech Ecosystem
• Parliamentary Panel Flags Concerns Over ₹20,000 Cr Deep Tech Fund

Deep Tech

• Deep Tech refers to advanced and disruptive technologies that rely on significant scientific and engineering breakthroughs.
• These innovations often require long-term research and development and have the potential to create transformative changes across industries such as healthcare, defense, artificial intelligence, and biotechnology.
• Examples:
  • Artificial Intelligence (AI) & Machine Learning – Self-learning algorithms, autonomous systems.
  • Quantum Computing – High-speed computation beyond classical computing limits.
  • Biotechnology & Genetic Engineering – CRISPR gene editing, personalized medicine.
  • Semiconductors & Advanced Materials – Nanotechnology, graphene-based materials.
  • Aerospace & Defense Technologies – Hypersonic vehicles, advanced missile systems.
  • Renewable Energy & Battery Technologies – Solid-state batteries, hydrogen fuel cells.
• Key Features:
  • High Research & Development Intensity – Requires deep scientific knowledge and long-term investment.
  • Disruptive Innovation – Capable of significantly transforming industries.
  • High-Risk, High-Reward – Often uncertain in early stages but can yield substantial economic and strategic benefits.
  • Interdisciplinary Approach – Combines multiple fields such as AI, biotech, and quantum physics.

Evolution of India’s Deep Tech Ecosystem

• India’s DeepTech ecosystem is growing rapidly, though still in its early stages compared to global markets.
• According to NASSCOM’s report "India’s DeepTech Dawn: Forging Ahead", the country had over 3,600 DeepTech startups, with 480 launched in 2023—double the number from 2022.
• While India ranks as the third-largest startup ecosystem globally, its DeepTech sector stands at the 6th position.
• Government Policies and Investments Driving Growth
  • The Indian government is actively promoting DeepTech through key initiatives, including:
    • Draft National DeepTech Start-up Policy – Aimed at fostering innovation.
    • ₹1 Lakh Crore Corpus (Interim Budget 2024) – To boost research and development.
    • ₹1,000 Crore Venture Capital Fund for the Space Sector – Supporting space-tech startups.
    • National Quantum Mission (2023) – Investment in quantum computing and communications.
    • India AI Mission – Strengthening AI research, innovation, and startups.
    • Other Initiatives like the Atal Innovation Mission, NITI Aayog’s programs, and Start-up India are providing support through accelerators and incubators.
• Union Budget 2025-26 and Deep Tech
  • Research, Development and Innovation - ₹20,000 crore to be allocated to implement private sector driven Research, Development and Innovation initiative announced in the July Budget.
  • Deep Tech Fund of Funds - Deep Tech Fund of Funds to be explored to catalyze the next generation startups.
  • It also unveils key initiatives for the tech sector, such as enhanced India AI mission funding, an AI Centre of Excellence for Education etc.

Parliamentary Panel Flags Concerns Over ₹20,000 Cr Deep Tech Fund

• A Parliamentary Standing Committee has raised concerns over the Government’s ₹20,000 crore interest-free loan scheme for deep tech sectors, warning that private entities could benefit disproportionately at the government’s expense.
• It also questioned the ability of fund managers to select impactful projects and suggested that directing funds to government institutions could have yielded better outcomes.
• Underutilisation of Funds in Scientific Research
  • The committee noted that the Department of Scientific and Industrial Research had not fully utilised its budget.
    • Over half of the allocated funds remaining unused as the financial year nears its end.
  • It supported an additional allocation of ₹363.9 crore but flagged that 62% of the department’s budget was spent on salaries and pensions, leaving only 31% for research, which limits infrastructure development and innovation.
• Concerns Over Biotechnology PSUs
  • The committee expressed concern over the poor state of two public sector undertakings under the Department of Biotechnology—BIBCOL and IVCOL.
  • It stressed the importance of reviving these PSUs to ensure affordable vaccine availability and strengthen India's position in the global vaccine market.
  • The committee recommended securing revival packages to enable these PSUs to support vaccine exports and enhance self-reliance in vaccine production.
• Recommendations for Policy Framework
  • The panel urged the government to address these concerns while formulating guidelines for the deep tech fund, ensuring transparency, accountability, and effective allocation to maximize national benefits.