ABSTRACT
An overview of financing of health research in India is presented based on data for the year 1987-88, collected from nearly 298 institutions involved in health research. Only 8 per cent of the funds was derived from foreign sources. Distribution of research funds was highly skewed. Research activity seemed to have concentrated in a few specialty institutes located in the four metropolitan cities. Research activities apparently matched the national health priorities, reproductive health being the most frequently reported area of research. The study concludes that since health is primarily a service sector, its research needs are not fully appreciated. As a result, research allocation in the health sector is lower, as compared to that for many other developmental sectors. The paper highlights some of the implications of this lopsided distribution to research capacity building in the country.