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On 1 February 2025, Minister of Finance (FM) Nirmala Sitharaman presented the Union Budget 2025. From a tech policy perspective, three key elements in the budget are particularly compelling: the initiatives to bridge the digital divide; the emphasis on emerging tech, innovation and deep tech; and the integration of technology solutions across various sectors.
Bridging digital divide
While India has witnessed major strides in digitalisation, there still exists a grave digital divide in terms of access to digital technologies, internet usage, availability of localised content and availing digital services. Data from the National Family Health Survey 2019–21 highlighted the urban- rural gap in internet usage. While 72.5 percent of males and 51.8 percent of females in urban areas had used the internet, only 48.7 percent of males and 24.6 percent of females in rural areas had similar access. To bridge this gap, the BharatNet project was launched in 2011 to provide high-speed internet to all gram panchayats in the country.
While 72.5 percent of males and 51.8 percent of females in urban areas had used the internet, only 48.7 percent of males and 24.6 percent of females in rural areas had similar access.
In its first phase, the BharatNet Project connected 1 lakh Gram Panchayats and established foundational infrastructure. The second phase expanded coverage to an additional 1.5 lakh Gram Panchayats using optical fiber, radio, and satellite technologies. The third phase aims to integrate 5G technologies, enhance bandwidth capacity, and ensure robust last-mile connectivity. Budget 2025 takes the project further to provide broadband connectivity to all government secondary schools and primary health centres in rural areas.
The lack of content in local languages is another significant factor contributing to the digital divide. Such unavailability of material in the vernacular language could significantly impact an individual’s access to information. The Budget 2025 introduces the Bharatiya Bhasha Pustak Scheme, an initiative aimed at providing digital books in vernacular languages for school and higher education. This scheme would also help reduce the cost of acquiring such material. In addition, the Gyan Bharatam Mission provides for setting up of a National Digital Repository of Indian Knowledge Systems for surveying, documentation and conservation of our manuscript heritage.
Individuals who are unable to access digital technology because of the digital divide are often left behind, missing out on the numerous benefits that digitalisation offers. They are unable to access essential resources and services being offered online. The Budget 2025 provides for facilitating the delivery of assisted digital services in rural areas through post offices. The post offices would also facilitate digital financial inclusion through direct benefit transfer and credit services. This allows the digital have-nots to access digital governance and other services despite not having the skills or technology to utilise them.
The Budget 2025 provides for facilitating the delivery of assisted digital services in rural areas through post offices.
Focus on emerging tech, innovation, and deep tech
Over the years, India has increasingly recognised the importance of research and innovation. This year’s Budget continued this trend with extensive focus on innovation. Fifty thousand Atal Tinkering Labs will be set up in government schools in the next five years to foster curiosity and scientific temper amongst young minds. These labs aim to foster innovation and entrepreneurship, creating a transformative, inclusive, and sustainable innovation ecosystem for students across India. Further, under the PM Research Fellowship, 10,000 fellowships for technological research will be provided across the Indian Institute of Technology and Indian Institute of Science.
India has been working towards developing a comprehensive Artificial Intelligence (AI) ecosystem under the India AI Mission. There has been a major focus on AI in the budget this year as well. The India AI Mission has been allocated a budget of around INR 2,000 Cr, a massive increase from INR 173 Cr in 2024-25. The Budget also provides for setting up a Centre of Excellence in Artificial Intelligence for Education. Similarly, the budget allocation for the Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India has increased from INR 2,500 Cr to INR 3,900 Cr, and the allocation for the Production Linked Incentive Scheme (PLI) has increased from INR 5,777 Cr to INR 9,000 Cr for the FY 2025-26.
To support the next generation of deep tech start-ups, a Deep Tech Fund of Funds has been proposed under the Budget 2025.
India’s focus on emerging and deep tech has also grown rapidly over recent years. Several Indian deep tech startups are making significant strides globally. To support the next generation of deep tech start-ups, a Deep Tech Fund of Funds has been proposed under the Budget 2025. Further, critical minerals are essential to support the growth of deep-tech solutions. Accordingly, the Budget 2025 provides for exemption on cobalt powder and waste, the scrap of lithium-ion battery, lead, zinc, and 12 more critical minerals. The Budget 2025 also provides for the setting up of the Manufacturing Mission—in furtherance of the “Make in India”, which will also facilitate and support Clean Tech manufacturing. In addition, the Budget 2025 has allocated Rs. 20,000 crores to implement private sector-driven research, development and innovation initiatives.
Sectoral applications of Technology
The Government is looking to bring in regulatory reforms to keep up with technological innovations and global policy developments. In addition, there are several sectors where emerging technology solutions are being deployed. Following are some of the proposed applications:
- The ‘Rural Prosperity and Resilience’ programme aims to address underemployment in agriculture by utilising technology solutions. Similarly, the ‘Mission for Cotton Productivity’ aims to provide the best of science and technology support to improve productivity and sustainability of cotton farming.
- A Social Security Scheme for Welfare of Online Platform Workers is being developed wherein the government will arrange for identity cards and registration of gig workers on the e-Shram portal, and subsequently healthcare under the PM Jan Arogya Yojana.
- The updated PM Street Vendor's AtmaNirbhar Nidhi Scheme aims to improve digital lending for street vendors through loans from banks and UPI-linked credit cards.
- BharatTadeNet, a digital public infrastructure, is being developed as a unified platform for international trade, facilitating documentation and financing solutions.
- The PM Gati Shakti portal will be established to promote public-private partnerships (PPPs) and support the private sector in project planning by providing access to relevant data and maps.
- The National Geospatial Mission will be established to develop foundational geospatial infrastructure and data. The Mission will also further the modernisation of land records, urban planning, and design of infrastructure projects.
The growing adoption of tech-based solutions across various sectors is not a new trend but a continuation of the previous budget. This ongoing emphasis underscores India's leadership in leveraging technology for the greater good.
The significant increase in allocations for emerging technologies like AI and semiconductors signals India’s drive to become a tech superpower.
Way forward
Budget 2025 takes an interesting two-pronged approach to technology. On one hand, it prioritises bridging the rural digital divide—a highly commendable step. With approximately 65 percent of India’s population residing in rural areas, the benefits of technology must extend beyond urban centres. It is important to ensure digital inclusion and that people living in rural areas also have access to the fruits of digitalisation. On the other hand, India's ambition to position itself as a global tech leader is unmistakably reflected in this Budget. The significant increase in allocations for emerging technologies like AI and semiconductors signals India’s drive to become a tech superpower. Furthermore, the focus on clean tech and deep tech underscores India’s vision of bolstering its tech-driven economy while gearing up for sustained growth and innovation in the future.
Basu Chandola is an Associate Fellow at the Observer Research Foundation
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