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Conflict of Interest in Tech Startup Panel Unavoidable but Managed, Says TDB Secretary

Addressing recent parliamentary disclosures, Technology Development Board (TDB) Secretary Rajesh Pathak stated that conflicts of interest among expert panels evaluating technology startups for public funding are unavoidable and must be actively managed rather than entirely eliminated.

What Happened

On July 30, the central government disclosed in the Rajya Sabha that several members of an expert panel constituted by the TDB had financial connections to commercial enterprises approved for government-backed financing. The response was provided by the Department of Science and Technology (DST) following questions raised by Congress MP Praveen Chakravarthy.

Responding to the disclosure and subsequent media coverage, TDB Secretary Rajesh Pathak explained that individuals possessing the deep expertise needed to evaluate high-risk technology ventures will almost certainly hold existing links to the innovation and venture funding landscape. Pathak emphasized that internal guidelines have been established to regulate these situations through strict recusals and enhanced voting requirements.

Key Highlights

  • Total Commitments: As of July, the TDB has cleared ₹2,192 crore in financing across 22 projects under the central government’s ₹1 lakh crore Research, Development and Innovation (RDI) Fund.
  • Panel Composition: The TDB Investment Committee is chaired by Dr. Saurabh Srivastava and includes industry experts K.R.S. Jamwal, Lalithesh Katragadda, Sudhir Mehta, Sanjay Nayak, Anand Deshpande, Gopal Srinivasan, Debashish Bhattacharjee, Bala C. Deshpande, Jaswinder Ahuja, and Sudhir Sethi. TDB Secretary Rajesh Pathak serves as member-secretary without voting rights.
  • Financial Ties Disclosed: Parliamentary records showed committee members had financial connections through their organizations to several approved companies, including Noccarc Robotics, EndureAir Systems, BigEndian Semiconductors, Peptris Technologies, Serigen Mediproducts, Tejas Networks, e-TRNL Energy, Dhruva Space, Astrome Technologies, ThinkMetal, Manastu Space Technologies, Ather Energy, Agnikul Cosmos, Neo Seekermetals, and Replus Engitech.
  • Recusal Protocols: Panel members are required to disclose any financial interest and leave the meeting room whenever their associated companies are deliberated.
  • Super Majority Requirement: Following a member’s recusal, an approval requires a super majority rather than a simple majority. In an 11-member scenario, at least eight votes are necessary to clear a proposal.
  • Direct Board Restrictions: Companies in which expert committee members serve as promoters or board directors are disqualified from consideration regardless of merit, though indirect fund-based stakes may be permitted.

Why This Matters

The TDB, an agency under the DST, is one of the initial Second-Level Fund Managers (SLFMs) designated to disburse capital from the Centre’s ₹1 lakh crore RDI Fund. The Biotechnology Industry Research Assistance Council (BIRAC) was also designated as an initial SLFM.

Unlike direct grant mechanisms, the RDI Fund channels capital through long-term, low-interest loans, equity, and equity-linked instruments to support technologies at Technology Readiness Level (TRL)-4 and above. This level represents technology that has advanced beyond laboratory proof-of-concept to laboratory-validated components. The fund is structured to bridge the capital gap for high-risk domains including deep technology, artificial intelligence, biotechnology, and the energy transition, making the governance and integrity of the selection process critical.

What to Watch Next

The government is in the process of selecting additional Second-Level Fund Managers alongside the TDB and BIRAC to deploy capital under the RDI Fund framework. Observers will also track the ongoing roll-out of financing across the remaining portions of the ₹1 lakh crore corpus under the established conflict-management and recusal guidelines.

Frequently Asked Questions

What is the Research, Development and Innovation (RDI) Fund?

The RDI Fund is a ₹1 lakh crore central government initiative aimed at boosting private-sector research and development. It provides long-term, low-interest loans, equity, and equity-linked instruments for high-risk technologies that have achieved Technology Readiness Level (TRL)-4 or higher.

How does the TDB manage conflicts of interest on its funding panel?

According to TDB Secretary Rajesh Pathak, panel members must declare their financial interests and recuse themselves from deliberations concerning related entities. Approving such proposals requires a super majority—at least eight affirmative votes out of an 11-member panel. Furthermore, entities where panel members serve directly as promoters or board directors are completely barred from consideration.

Which agencies act as fund managers for the RDI Fund?

The Department of Science and Technology functions as the nodal ministry. The Technology Development Board (TDB) and the Biotechnology Industry Research Assistance Council (BIRAC) are the first designated Second-Level Fund Managers, with additional managers currently being selected.

Source: Based on disclosures in Parliament and reporting by The Hindu.