Cabinet Approves ₹1 Lakh Crore RDI Scheme to Boost Private Sector Innovation

The Union Cabinet has approved the Research Development and Innovation (RDI) Scheme with a financial outlay of ₹1 lakh crore. Reportedly, the initiative is aimed at supporting private sector-led research, development, and innovation across strategic and emerging sectors.

Financing Structure

The RDI Scheme will operate through a two-tier funding structure. A Special Purpose Fund (SPF) will be created under the Anusandhan National Research Foundation (ANRF), which will disburse funds to second-level managers such as AIFs, DFIs, and NBFCs. These will offer long-term loans at low or nil interest, and in some cases, equity support.

The scheme targets sunrise sectors including energy, defence, semiconductors, AI, quantum computing, and biotechnology. It is also designed to fund high TRL (Technology Readiness Level) projects and support the acquisition of critical technologies. A Deep-Tech Fund of Funds will also be facilitated.

Governance and Implementation

The ANRF Governing Board, led by the Prime Minister, will steer the scheme. The Executive Council of ANRF will suggest guidelines, fund managers, and sectoral focus. An Empowered Group of Secretaries (EGoS), chaired by the Cabinet Secretary, will handle changes, project approvals, and periodic reviews. DST will act as the nodal department.

Employment Linked Incentive (ELI) Scheme

In parallel, the Cabinet has cleared the ELI Scheme with an allocation of ₹1.07 lakh crore to generate 35 million jobs between August 2025 and July 2027. It includes wage subsidies for first-time employees and incentives for employers hiring additional staff, especially in the manufacturing sector.

Background 

India’s R&D spending has remained under 0.7% of GDP for decades. The private sector contributes around 36%, compared to 70% in the US and 79% in China. The RDI scheme intends to address funding gaps and strengthen India's R&D capacity through structured support.

Read More: Union Cabinet Approved Employment Linked Incentive Scheme with 3.5 Crore Jobs in Focus!

Conclusion

The scheme is to increase private participation in research and offer targeted financial support to critical projects, while the ELI aims to boost employment generation over the next 2 years.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.