Gross Expenditure on Research and Development (GERD)

Gross Expenditure on Research and Development, or GERD, is the total money a country spends on research and development (R&D) inside its borders in one year. It adds up spending by the government, companies, universities and non-profit bodies. GERD is usually shown as a percentage of GDP, so that countries of different sizes can be compared fairly. It is the most common single number used to judge how seriously a country invests in science and new technology.

Why do we measure it?

A country becomes rich and strong over the long run by creating new knowledge, not only by copying it. Medicines, satellites, semiconductor chips and new crop varieties all start as research. Think of GERD like a family's spending on its children's education: it does not bring money today, but it decides what the family can earn tomorrow. If GERD is low, a country ends up buying technology from others and paying royalties for it.

Where does the method come from?

Countries measure GERD using a common rulebook called the Frascati Manual. It is published by the OECD (Organisation for Economic Co-operation and Development), a group of mostly rich countries. The first version came out in 1963 after a meeting in Frascati, Italy. The current version is the seventh edition, released in 2015. Because everyone follows the same rules, India's GERD can be compared with that of China or the USA.

What counts in GERD?

The Frascati Manual defines R&D as creative and systematic work done to increase knowledge and to find new uses for it. GERD includes:

• Current spending: salaries of researchers and support staff, lab materials and other running costs.
• Capital spending: land, buildings, machines and equipment used for research.

It covers three kinds of research:

• Basic research: work done to understand how nature works, without any direct use in mind (for example, studying how a protein folds).
• Applied research: work aimed at a specific practical goal (for example, designing a drug that blocks that protein).
• Experimental development: turning the research into new products or processes (for example, testing and scaling up the drug).

Who spends the money?

The Frascati Manual groups R&D spending into four sectors:

• Business enterprise: private companies and public sector companies.
• Government: central and state government departments and their labs.
• Higher education: universities and colleges.
• Private non-profit: trusts, foundations and charities.

In rich research nations, companies do most of the spending, often around 70% of GERD. In India, the government has traditionally done most of it.

How is India doing?

The DST publishes India's official R&D numbers in its "Research and Development Statistics" reports. The key figures from the 2025-26 edition (released August 2026) are:

• GERD grew from ₹79,356 crore in 2013-14 to about ₹2.45 lakh crore in 2023-24, roughly three times in ten years.
• As a share of GDP, GERD rose from 0.64% in 2020-21 to about 0.84% in 2023-24.
• The private sector's share rose to 45.2% in 2023-24, from 32.2% in 2020-21. Some reports of the same data put total business spending a little above half of GERD.
• Multinational companies (MNCs) did about 71.3% of business R&D in 2023-24.
• India has about 5 lakh full-time equivalent researchers, or about 354 per million people.
• Women make up about 29% of the R&D workforce, up from 18.6% in 2020-21.
• About 1.10 lakh patents were filed in India in 2024-25, and about 62% of them came from Indian residents.
• India ranks 3rd in the world in scientific publications (behind China and the USA) and 6th in resident patent filings.

How does India compare with others?

As of recent international data, Israel spends about 5% or more of its GDP on R&D and South Korea close to 5%. The USA spends about 3.5%, Japan about 3.3% and China about 2.4% to 2.7%. India's researcher density of 354 per million is far below that of countries like South Korea, which has several thousand per million [Unverified: exact figure varies by year and source].

India's policy targets

India has set GERD goals many times:

• The Scientific Policy Resolution, 1958 was India's first science policy. It made the state responsible for building science.
• The Technology Policy Statement, 1983 focused on self-reliance in technology.
• The Science and Technology Policy, 2003 set a target of raising R&D spending to 2% of GDP. This was never reached.
• The Science, Technology and Innovation Policy, 2013 again aimed at 2% and wanted more private investment.
• The draft Science, Technology and Innovation Policy (STIP), 2020 is India's 5th such policy. It aims to place India among the top three scientific superpowers in the coming decade. It was built through about 300 rounds of talks with over 40,000 stakeholders.

Commonly confused concepts

• GERD vs government science budget: The Union Budget's allocation for science ministries is only one part of GERD. GERD also includes company, university and state spending.
• GERD vs GII rank: GERD measures money going in (an input). The Global Innovation Index, published by WIPO (World Intellectual Property Organization), ranks countries using many inputs and outputs, such as patents, exports of high-tech goods and startup activity. India was 38th in GII 2025, up from 46th in 2021.
• Research publications vs patents: Papers show new knowledge; patents show ideas that someone wants to protect and sell. A country can publish a lot but patent little, which signals weak links between labs and industry.
• R&D vs innovation: R&D is the creation of knowledge. Innovation is the successful use of new ideas in the market, and it can happen even with little formal R&D.

Issues, criticism and the way forward

• Too little money overall: At below 1% of GDP, India spends a much smaller share than every major research nation.
• Weak private spending: Many Indian firms prefer to buy or license technology rather than build it. A large share of business R&D is done by foreign MNCs, whose benefits may not stay in India.
• Universities do little research: Most public R&D money goes to big government agencies such as defence, space and atomic energy. Universities, which train future scientists, get a small share.
• Quality and brain drain: Many talented researchers leave for foreign labs because of better pay, equipment and freedom. Critics also point to slow grant releases and heavy paperwork.
• Way forward: Experts suggest more competitive grants for universities, tax and loan support for company R&D, stronger links between labs and industry, and faster patent processing. The ANRF and the RDI Fund are recent steps in this direction.

Concepts to Know

• GDP (Gross Domestic Product): The total value of all goods and services produced in a country in a year. It is the usual measure of the size of an economy.
• Patent: A legal right given by the government to an inventor. For a fixed time (usually 20 years), nobody else can make or sell the invention without permission.
• Full-time equivalent (FTE): A way of counting workers by total time worked. Two people who each spend half their time on research count as one FTE researcher.
• Royalty: A fee paid to the owner of a technology or patent for the right to use it.
• OECD: The Organisation for Economic Co-operation and Development, a Paris-based group of 38 mostly developed countries that sets common standards for economic data. India is not a member.