The Ministry of Electronics and Information Technology (MeitY) has been allocated a substantial ₹21,936.90 crore in the Union Budget for 2024-25, marking a 52 percent increase from the previous year. This significant funding boost underscores the government's commitment to advancing key sectors such as semiconductors and artificial intelligence (AI), where ongoing development is crucial.
The enhanced budget provides a major opportunity for MeitY to drive growth in several critical areas. According to Mr. S. Krishnan, Secretary of MeitY, the increased funding will support advancements in semiconductor manufacturing, electronics production, and research and development across the IT and ITeS ecosystems. “This allocation will not only bolster domestic manufacturing but also position India as a competitive player in the global market, contributing to both direct and indirect employment growth,” Mr. Krishnan told ETCIO.com.
One of the most notable aspects of the budget is the substantial increase in funding for the semiconductor sector. The allocation has surged from ₹3,000 crore in 2023-24 to ₹6,903 crore for 2024-25, reflecting a significant commitment to strengthening India's semiconductor capabilities. Additionally, the Production Linked Incentive (PLI) scheme for electronics has seen an increase from ₹4,645 crore to ₹6,200 crore.
Other key areas receiving enhanced funding include the IndiaAI mission, which has been allocated ₹551.75 crore, and cybersecurity, with a budget of ₹715 crore. Research and development in IT and electronics have also received a boost, with an allocation of ₹1,148.25 crore.
While talking about the expected impact in AI space, he said that the Union Cabinet approved ₹10,372 crore for the IndiaAI Mission, aiming to develop over 10,000 GPUs and foundational models with over 100 billion parameters. This initiative focuses on sectors like healthcare, agriculture, and governance, allowing startups to develop AI tools. The Union Budget allocated ₹551.75cr, with the provision for an increase if more funds are required.
In his statement that India has the potential to serve the world as an AI back office, he termed India’s biggest strength in human resources and referred to the Stanford University report that proves it in its research. This positions India at the forefront of the development of AI services and tools for India and the world.
The whole purpose of Artificial Intelligence is to replace humans in the workforce which can raise the potential risk of a bigger scale of unemployment after reaching the mature stage of performing critical tasks. Addressing the concern, Mr. Krishnan agreed on AI replacing white collared jobs as matured AI can handle the programming and coding work and might replace programmers and developers from the workplace. However, he suggested that this can be countered with effective skill development; if AI is fully leveraged it can safeguard white-collared and blue-collared jobs in India.
While talking about the challenges India is facing in the semiconductor space, he said that the country is doing great as around 20% of the world's semiconductor design workforce is based in India, with many major global companies operating their design facilities in the country. However, the challenge lies in semiconductor manufacturing, which demands a different skill set. The industry's advanced precision manufacturing techniques necessitate specific skills, requiring training professionals to meet these needs. Another challenge is building an ecosystem of semiconductor manufacturers and accessory product and service providers including machinery, materials, chemicals, gases, and other essential products and services. One chip manufacturing plant or ATMP is insufficient, he claimed.
Upon being asked about India’s position in the R&D sector which is currently lagging behind China, Taiwan, South Korea, and Western countries, the MeitY secretary informed about NRF (Anusandhan National Research Foundation) which is the Government of India’s initiative to set up Research and Development at an advanced level. For that, ₹1 lakh crore has been granted in the recent budget.
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