Big steps have been taken by the Finance Minister Nirmala Sitharaman with the Union Budget 2025 to put India at the forefront of technological innovation. It has thus set aside huge allocation for fast-tracking artificial intelligence (AI) and startup sectors in the country.
Significant Investments in AI and Startups
Among various proposals, this budget announced the setting up of a new Fund of Funds (FoF) for startups with a sizeable ₹10,000 crore. This fund aims to assist the early-stage companies in the development of such innovative and enterprising spirit in the country.
Further, the government has suggested the setting up of a Centre of Excellence (CoE) in AI for Education with a ₹500 crore investment. This CoE aims to promote AI in the educational sector. Thus, enhancing methodologies and outcomes of teaching and learning.
Extended Support for Startups
Keeping in mind the fast pace at which the startup ecosystem works, this budget has proposed an extension of the period of firm incorporation of the startups. Which is by another five years. As a result, more Indian firms will be able to avail themselves of various benefits for a longer period of time. That is to establish and run their operations on a larger scale.
Vision for a Developed India by 2047
The budget fits within the framework of the vision of Viksit Bharat@2047. With the intent that by the 100 years of freedom, India will be a developed nation. This will mean sustaining economic growth of nearly 8% for the next decade or so.
These strategic initiatives highlight how committed the government is to promoting a strong AI ecosystem. And fostering startup culture in India. By attracting investments in innovation and laying supportive frameworks. The Union Budget 2025, therefore, rests on making India a recognizably stronghold for technology and entrepreneurship.
India’s Union Budget laid out a clear vision for AI and startup growth across sectors.
One example in action is the KumbhSahaiyak chatbot which is using AI to assist millions of pilgrims during the Kumbh Mela see how it helps.
Updates Since the Budget Announcement
- The government has moved forward with a Deep Tech Fund of Funds. Which is giving startups in AI, robotics, and other advanced areas a stronger shot at early funding.
- The promised ₹500 crore Centre of Excellence for AI in Education is now confirmed, aiming to train talent, back research, and build real classroom-ready AI tools.
- Startups now have until March 2030 to incorporate if they want to qualify for tax breaks and other benefits. This opens the door for thousands of new founders.
- We’re seeing a push for Global Capability Centres (GCCs) in smaller cities. That is with new infrastructure and support to spread AI and startup opportunities beyond metro hubs.
- The budget also introduced simpler tax rules and compliance steps, making it easier for founders to focus on growth instead of paperwork.
