Union Budget 2025

Sitharaman Announces Rs 500 crore Allocation to Three AI Centres of Excellence

Experts have indicated that the allocation of Rs 500 crore seems to be lower than what India really requires

Budget 2025
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Finance Minister Nirmala Sitharaman has announced the setting up of three Centre for Excellence (CoE) in Artificial Intelligence (AI) for education with an outlay of Rs 500 crore.

However, some experts have indicated that allocation of Rs 500 crore for AI seems to be lower than what India really requires.

"Allocation of Rs 500 crore for setting up 3 centres of excellence for AI seems to be lower than what India really requires, especially considering amounts committed by other countries," said Pranay Bhatia, Founder and Managing Partner, EFFIINEXT Advisory LLP

In October last year, Union Education Minister Dharmendra Pradhan also announced the creation of three AI CoEs that will be focussing on healthcare, agriculture, and sustainable cities.

The Indian government has been aggressively pushing for AI investment. In March 2024, the government approved Rs 10,372 crore for The IndiaAI Mission. The five year mission intends to build a comprehensive AI system by expanding computing access, enhancing data quality, and advancing indigenous AI capabilities. 

Further, the mission also reportedly selected ten firms to bid for 10,000 GPU Mega tenders. Some of the firms that have been selected includes Jio Platforms, Tata Communications, CMS Computers India Pvt Ltd, Ctrls Datacenters Ltd, E2E Networks Limited and others. The Economic Survey has also talked about collaboration between institutes for proper implementation of AI. It says, “Policymakers must balance innovation with societal costs, as AI driven shifts in the labour market could have lasting effects. Similarly, the corporate sector must act responsibly, handling the introduction of AI with sensitivity to India’s needs.” 

The survey has also highlighted, “With robust institutional frameworks and strategic planning, AI can serve not as a crisis but as a catalyst for equitable economic transformation, positioning India to thrive in an increasingly automated world.”

Further, the survey tabled on January 31, indicates that a “collaborative effort between government, private sector, and academia is essential minimise the adverse societal effects of AI-driven transformation and deliver inclusive growth.” It has also mentioned that India should take advantage of the early stage of AI development and create strong policies. This in turn will help the country reduce the potential negative impacts of AI, such as job losses.

To add to it, recently, Ashwini Vaishnaw, Union minister for electronics and information technology also highlighted that India is all set to join the global AI race. He said at a press briefing, “The foundational models made in India will be able to compete with the best of the best in the world.” He further added that with algorithmic efficiency, the country can create AImodels in a much shorter time frame. 

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