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Interim Budget 2024: Corpus of ₹1 lakh crore to fund technology research
Presenting the Union interim budget for the 2024-25 financial year, Sitharaman said innovation was the foundation of development
Finance minister Nirmala Sitharaman announced a ₹1 lakh crore corpus to help finance research in technology, an initiative that she said was part of the government to catalyse growth, employment and development in the country.
Presenting the Union interim budget for the 2024-25 financial year, Sitharaman said innovation was the foundation of development, attributing it to Prime Minister Narendra Modi’s “Jai Jawan Jai Kisan Jai Vigyan and Jai Anusandhan” mantra, which builds on former PM Lal Bahadur Shastri’s famous “Jai Jawan, Jai Kisan” mantra, to which former PM Atal Bihari Vajpayee had added “Jai Vigyan”.
“A corpus of ₹1 lakh crore will be established with 50-year interest free loan provided. The corpus will provide long-term financing or re-financing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains,” the finance minister said.
Read here: Interim budget 2024-25: Capex raised to 3.4% of GDP despite fiscal consolidation
Union information technology and communications minister Ashwini Vaishnaw called the plan a “game changer” for India. “[There are] so many products where our country can take the lead due to the talent we have. Product and technology development projects will get a way through which the country can really become a product nation. Today, we are a talent nation; .... with this corpus of ₹1 lakh crore, our country will get opportunities by which products can be developed,” he said.
Details of this corpus and how the projects will be selected will be released in the coming days, Vaishnaw added.
Union minister of science and technology, Jitendra Singh, said the corpus will promote innovative start-ups and establish an ecosystem of research and entrepreneurship. “The interim budget was just a trailer for what the final budget is going to look like, and it is an extension of approach that Prime Minister Modi has been taking in promoting innovations. The Jai Anusandhan corpus will create a wholesome ecosystem for start-ups in India. It will support and enable handholding in the early stages of start-ups,” Singh said.
For the science and technology departments, the focus of Thursday’s interim budget was also on the two big national programmes that were cleared by parliament last year—the National Quantum Mission and the Anusandhan National Research Foundation.
The finance minister in her budget speech allocated ₹477crores for the National Quantum Mission and ₹2,000 crores for the Anusandhan National Research Foundation (NRF). While this is the first allocation for the quantum mission, for NRF, the government is projected to have utilised ₹258.60 crore, a fraction of ₹2,000 crore that was allocated for it in the previous Budget.
Anil Prakash, co-founder and holds the position of Director General at Satcom Industry Association-India (SIA-India), a not-for-profit space sector association, said, “...The allocation of significant funds for research and innovation, coupled with a focus on sunrise sectors, including the space industry, signifies a significant boost. This financial support will catalyse advancements in space technology, satellite communications, and space exploration, fostering growth and positioning India as a key player in the global space arena.”
In all, the interim budget allocated a total of ₹1,15,752 crore for 2024-25 for IT and telecommunications, 20.85% up from funds projected to be spent (revised estimates) of ₹95,781 crore for 2023-24.
For FY25, the budget estimate for the ministry of electronics and information technology (Meity) increased 48.29% from ₹14,421.25 crore to ₹21,385.15 crore RE.
Bulk of it was devoted to production linked incentive (PLI) schemes to encourage hardware and semiconductor manufacturing. PLI for large scale electronics manufacturing, and IT hardware saw a 35.96% increase from ₹4,559.88 (RE-2023-24) crore to ₹6,200 crore (BE-2024-25).
The government has in the past year doubled down on efforts to erect a domestic semiconductor and electronics hardware industries, efforts that it says are linked to its larger “aatma nirbharta” (self sufficiency) approach towards and critical technologies and to establish India as a reliable partner in the global supply chain, which in turn will bring in foreign investment and help create jobs.
The budget allocation for modified programme for development of semiconductors and display manufacturing ecosystem in India increased by 359% from ₹1,503.36 crore RE-2023-24 to ₹6,903 crore BE 2024-45.
“10 years back, we were importing 98% of the mobile phones that we use. Today, 99% are made in India,” Vaishnaw said.
Allocation for cybersecurity projects saw an 89.75% increase from ₹400 crore (RE-2023-24) to ₹759 crore (2024-25).
Separately, the government increased the allocation for National Informatics Centre by 12.67% from ₹1,552 crore (RE, FY24) to ₹1,748.64 crore for 2024-25. The budget for Computer Emergency Response Team (Cert-In) saw a 15.38% increase from ₹208 crore (RE) to ₹240 crore.
