Union Budget 2020: 'Allocation to space exploration should be considered a seed fund'

Union Budget 2020: 'Allocation to space exploration should be considered a seed fund'
ISRO Polar Satellite Launch Vehicle (PSLV) C34BCCL

  • The largest allocation for the Department of Space during the Union Budget 2020 will be towards Gaganyaan.
  • The benefits of more money for space projects will spill over to the private sector.
  • Business Insider spoke to Chaitanya Giri from Gateway House, a Delhi-based think tank, about his expectations from the budget this year.
This week, India’s Finance Minister Nirmala Sithraman will announce the Union Budget 2020 and many people will have their eyes trained on the allocation towards India’s Department of Space (DoS).

This will be the first budget where you have expansive projects like Gaganyaan with funding across different government departments. Experts also believe that the DoS will exceed funds from last year of ₹12,000 crores.

"The largest constituent in the space budget this year will be Gaganyaan," Chaitanya Giri, a fellow of space and ocean studies programme at Gateway House, told Business Insider.

"Being a multi-ministerial, multi-agency megaproject, its allocations will come not only via the Department of Space but via the Ministry of Science and Technology and Ministry of Defence too," he added.

More money for space projects in the budget means more money for public-private partnerships as well. "The more the budget, the greater the number of projects — and the numerous opportunities for public-private collaboration open up," he explained.

The budget isn’t just an allocation — it’s a seed fund for private players
Benefits of projects in the space sector aren’t restricted only to the Indian Space Research Organisation (ISRO). They will also spill over to the private sector.

"The growing space budget must be viewed not merely as an allocation but as a seed fund," said Giri.

For instance, India is part of a 30-meter telescope project being built in Hawaii is using software from Persistent Systems in Pune. Godrej Aerospace and L&T are a part of commercially manufacturing PSLVs.

It’s essentially a trickle-down effect. More money in the budget means more contracts and, ultimately, more research and development.

"As the government increases the budget, the R&D agencies of the government reach out to the private sector with the same money for co-development, turn-key solutions, and supplies," Giri explained.

It’s a win-win situation for both stakeholders. ISRO doesn’t have the manpower and workforce to build everything on its own and the private sector’s research needs a boost. Components required by ISRO have been provided by large companies, who — over the years — have built competencies to build them.

"I am sure the private sector is using such contracts to build their innovation and invention portfolios. That will help them and the nation in the long run," he said.

The need for a national space policy
For the private sector to play a more active role in India’s space sector, the government needs to pass the Space Activities Bill, which is still under consideration. It would allow private players to participate in the launch market after obtaining the relevant license from the government.

"In the coming years, as India forms specific parliamentary legislation for space activities, things will change completely for the private space industry. India is slowly beginning to view space as a major economic undertaking and for now, that is a really good sign," said Giri.

And the private sector also has a little bit of catching up to do. There is a lot of scope of new-age startups an companies in India. They need not supply competencies that ISRO and the existing ecosystem already provides. Instead, the more novel their product, the higher their chance of assimilation in the space ecosystem.

"The government has been very proactive in comprehending the changing space technological paradigm around the world. But, it’s synergies with the private sector are huffing and puffing to keep pace with the rapid scientific and technological strides caused by Industry 4.0 revolution," explained Giri.

He recommends that the private sector needs to invest more heavily in R&D, preferably through CSR to scout for technology that can be applied to on a large scale. It is no longer enough for companies to get into agreements with foreign players and assemble their products here in India.

"This huff-and-puff is due to a weak public-private ‘lung capacity’ on innovation," said

See also:
Exploring space is expensive — and ISRO needs more money from the 2020 Union Budget

ISRO outlook 2020: Indian private sector eyes $30 billion space launch pie

ISRO's got a long way to go before it generates revenue from spin-off technologies