India's new RDI Fund, designed to boost private R&D, faces scrutiny after reports of questionable loan allocations to panel-linked startups. This reignites the long-standing debate: market efficiency versus government-led resource allocation. While acknowledging the fund's aim and East Asia's success with state-backed industry, the article warns against familiar pitfalls of active industrial policy, such as firms seeking central favors instead of market advantage. It emphasizes the need for states to identify worthy projects and, crucially, to let losers go. The author urges caution, stressing optimal capital employment and market wisdom over panel decisions.