Twenty More Hands Are About To Allocate India's ₹1 Lakh Crore Deep-Tech Fund

More than twenty additional second-level fund managers are due to be appointed under India's ₹1 lakh crore Research, Development and Innovation Fund, according to a review meeting chaired by Science and Technology Minister Jitendra Singh on 19 August. Officials said the process would conclude within about a month. A further round of disbursals was described as imminent.

The fund, cleared by the Union Cabinet in July 2025 and launched by the Prime Minister that November, sits in a Special Purpose Fund under the Anusandhan National Research Foundation and flows through a two-tier structure. Only two second-level managers exist so far: the Technology Development Board and the Biotechnology Industry Research Assistance Council, each with an initial ₹2,000 crore. Support takes the form of collateral-free loans at roughly 2 to 4 per cent over tenures up to 15 years, covering as much as half a project's cost, with equity of up to 25 per cent also possible.

Nearly 200 applications came in for the manager role, around 80 per cent of them from venture capital firms. Selection uses a quality and cost-based method that weights quality at 80 per cent. Business Standard reported that IvyCap Ventures, Speciale Invest, Chiratae Ventures and Kalaari Capital are among the first cohort shortlisted.

The expansion follows scrutiny of the first allocation. In August, an Indian Express investigation drawing on Registrar of Companies filings and parliamentary records reported that 15 of the 22 companies approved in the Technology Development Board's opening round had investment ties to seven members of the committee that selected them. Those 15 received about ₹1,377 crore of the ₹2,192 crore sanctioned, roughly 62 per cent of the total.

The government's defence is more substantial than most of the coverage has allowed. Conflicted members disclosed their interests and took no part in evaluating or approving the relevant proposals. Recommendations require a supermajority of eligible members and then final approval from the TDB Board. Money is committed against specific projects rather than to companies as entities, and it is released only once the beneficiary brings matching capital from non-government sources. These are repayable loans, not grants. No rule violation has been established.

TDB secretary Rajesh Pathak also made an honest point on the day the report appeared. Conflict of interest, he said, is unavoidable on expert panels of this kind, and is managed through disclosure and recusal.

He is right, and that is exactly the difficulty. India has perhaps a few dozen people with real judgement about deep-tech investment risk. Any committee drawn from that pool will have ties to any credible list of fundable companies. Seven of eleven voting members overlapping with fifteen of twenty-two selections is not evidence of capture. It is evidence of a small pond.

Which is why arguing about disclosure and recusal misses where the discretion actually sits. Recusal governs the vote. It does not govern who hears that applications are open, whose technical claims are understood without explanation, or which of 124 proposals gets read generously. In a process that narrowed 124 applications to 22, most of the judgement happens well before anyone votes.

The scaling problem is why this matters now rather than in hindsight.

The criteria that identify a good deep-tech fund manager are the same criteria that produce portfolio overlap. The selection method gives 80 per cent weight to quality, which includes demonstrated experience backing research-intensive companies and a record of mobilising private capital. A firm with that record has, by definition, already invested in the companies most likely to qualify. Speciale Invest, among those reported to be shortlisted, has backed Agnikul, CynLr, QNu Labs and GalaxEye Space. That is the argument for appointing it. It is also the mechanism by which overlap arrives.

So the scheme selects for conflict structurally, and turning two allocators into more than twenty multiplies that. This is not an argument against expanding. It is an argument that the safeguard has to move from input purity, which is unattainable, to output transparency, which is not. Publishing the rejected list with its scoring, the recusal record attached to each decision, and the subsequent investment activity of committee members in funded companies for some years afterwards would not remove the overlap. It would make it observable, which is the most any system of this design can offer.

The cost of moving slowly is already visible. A substantial part of the ₹20,000 crore allocated for FY26 went undeployed, for the plain reason that only two managers existed to deploy it. The Department of Science and Technology has said so itself.

The stakes come from the numbers elsewhere this week. India took 1 per cent of global venture funding value in the first seven months of 2026 while global deal value rose 161 per cent, and Indian chip-design companies have raised $162 million in total since 2023. The RDI Fund is the country's answer to that gap, and there is no second answer queued behind it. Getting the allocation mechanism right is not a procedural detail. It is the entire scheme.

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