Why In News?
The Special Purpose Fund (SPF) under the Anusandhan National Research Foundation (ANRF) provides long-term, low-interest financing for private sector-led deep-tech and strategic research.
What is the Special Purpose Fund (SPF)?
The SPF is a dedicated financing vehicle created under the ANRF Act, 2023, to house and deploy the Research, Development and Innovation (RDI) Fund for research, development, and innovation.
The RDI Fund was approved by the Union Cabinet in July 2025, with a total outlay of ₹1 lakh crore over six years, including ₹20,000 crore for FY 2025-26 .
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The fund operates as a long-term financing mechanism, designed to remain active for up to 50 years, since repayments flow back into the same pool for redeployment rather than to the Consolidated Fund of India.
Objectives of the Special Purpose Fund
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Promote private sector R&D, historically among the lowest contributors to India's Gross Expenditure on Research and Development compared to peer economies.
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Support deep-tech startups by financing ideas from prototype to commercialisation.
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Encourage high-risk, high-impact innovation that conventional bank lending typically avoids.
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Strengthen strategic technologies critical for national security and technological sovereignty.
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Promote technology commercialisation, ensuring lab-based research reaches the market as globally competitive products.
What is the Anusandhan National Research Foundation (ANRF)?ANRF is India's apex body for providing high-level strategic direction to research, innovation, and entrepreneurship across science, technology, health, and agriculture. It was established under the Anusandhan National Research Foundation Act, 2023. ANRF absorbed and replaced the Science and Engineering Research Board (SERB), established in 2008, which now stands repealed. Institutional structure: A Governing Board of 15 to 25 eminent researchers, chaired by the Prime Minister as ex-officio President, with the Union Ministers of Science & Technology and Education as Vice-Presidents. Role in the innovation ecosystem: ANRF aims to "seed, grow and promote" R&D across India's universities, colleges, and research institutions, and to act as a liaison between researchers, industry, and government |
Key Features of the Fund
₹1 lakh crore corpus: Deployed over six years, aiming to mobilise up to ₹10 lakh crore in total investment by crowding in private capital.
Long-term, low-cost financing: Structured as loans at 3% to 4% interest with 12-15 year tenures, equity participation up to 25%, or a hybrid debt-equity mix — cheaper than market financing.
Financing through Second-Level Fund Managers (SLFMs): ANRF does not fund startups directly; it channels capital via institutions like the Technology Development Board (TDB) and BIRAC, each given ₹2,000 crore in the first iteration.
Focus on deep-tech and sunrise sectors: Prioritises technologies with long gestation periods and high capital intensity.
Technology Readiness Level (TRL)-based support: Eligible entities must be at TRL 4 to 6, i.e., beyond lab-proof-of-concept but before full commercial scale.
Eligibility conditions: Entities must be incorporated and headquartered in India, controlled by resident Indian citizens as per FDI norms, and IP generated must be registered and retained in India.
Priority Sectors
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Artificial Intelligence
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Quantum Technologies
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Semiconductors
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Space Technology
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Biotechnology
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Advanced Manufacturing
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Clean Energy
Significance
Atmanirbhar Bharat: Reduces India's dependence on imported critical technologies by building indigenous deep-tech capacity.
Innovation-led economic growth: Supports the vision of Viksit Bharat 2047 by positioning R&D as a growth driver, not just a public expenditure item.
Global technology competitiveness: Helps India move up the global innovation and patent value chains in sectors like AI and semiconductors.
Strategic technology security: Domestic control over space, quantum, and semiconductor technologies strengthens national security.
Startup ecosystem development: Provides patient capital that Indian deep-tech startups have historically struggled to access, given the long gestation and high failure risk of hardware/deep-tech ventures compared to software startups.
Source: INDIANEXPRESS
PRACTICE QUESTIONQ. Consider the following statements regarding the Research, Development and Innovation (RDI) Fund:
Which of the statements given above is/are correct? (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3 Answer: (a) 1 only Explanation: Statement 1 is Correct: The RDI Fund is operationalized as a Special Purpose Fund (SPF) housed under the Anusandhan National Research Foundation (ANRF). The ANRF is a statutory body established under the Anusandhan National Research Foundation Act, 2023, and it operates under the Department of Science and Technology (DST), Ministry of Science and Technology. Statement 2 is Incorrect: The ANRF does not disburse funds directly to startups or industries. Instead, it employs a two-tiered funding structure where the SPF (Tier 1) channels capital to Second-Level Fund Managers (SLFMs) (Tier 2). These SLFMs, which include entities like the Technology Development Board (TDB), BIRAC, and other Alternative Investment Funds (AIFs), are responsible for evaluating proposals and disbursing funds to eligible entities. Statement 3 is Incorrect: The scheme is designed as a revolving fund (or "evergreen" fund) for a duration of approximately 50 years. Repayments from funded entities (principal and interest) flow back into the Special Purpose Fund (SPF) for redeployment into new projects, rather than returning immediately to the Consolidated Fund of India. While the corpus is expected to be returned to the Consolidated Fund of India starting in the 50th year, the immediate repayments from borrowers do not go to the CFI, which distinguishes it from non-revolving government grants or direct loans. |
