Union Budget 2025: Govt bumps up allocation to MeitY by Rs 8460 crore

The government has increased the allocation to the Ministry of Electronics and Information Technology (MeitY) by about Rs 8,460 crore in the Union Budget 2025-26.

The allocation in FY2024-25 was Rs 17,566.31 crore, while it now stands at Rs 26,026.25 crore for FY25-26, according to the Demand for Grants for 2025-26 document released today by the Ministry of Finance.

The increased allocation of roughly ~ $1 billion will go into central sector projects, including the government’s flagship programmes such as the India AI Mission; semiconductor and electronics manufacturing; and the production linked incentive (PLI) scheme.

The allocation for India AI Mission has gone up by more than 11 times to Rs 2,000 crore. For the year 2024-25, this was Rs 173 crore. A substantial part of this allocation is expected to fund the GPU compute project under the AI mission.

Minister for Electronics & IT, Ashwini Vaishnav, recently announced the companies that will provide low- and high-end GPU as a service for researchers, startups, and the academia. He said Jio Platforms, E2E Networks, Locus Enterprise, and NxtGen Datacenter and Cloud Technologies have already procured 10,000 GPUs and are ready to offer AI compute services.

Within the central sector schemes, the allocation for OSAT (outsourced semiconductor assembly and test), ATMP (semiconductor assembly, testing, marking, and packaging), compound semiconductors, silicon photonics, and sensors fab has increased from Rs 2,500 crore to Rs 3,900 crore.

The government has approved four ATMP and OSAT projects under the semiconductor mission. They are: Micron Technologies (Rs 22,526 crore investment), Tata Electronics Private Limited (Rs 27,120 crore), CG Power and Industrial Solutions Limited (Rs 7,584 crore), and Kaynes Technology India Limited (Rs3307 crore).

The allocation for setting up semiconductor fabs has been doubled from Rs 1,200 crore last year to Rs 2,499 crore this year. This is expected to go towards Tata Electronics’ fab project, in collaboration with Taiwan’s semiconductor company, PSMC. The project involves an investment of Rs 91,526 crore.

The government has also allocated Rs 400 crore for the modernisation of MeitY’s Semiconductor Laboratory in Mohali. Last year, the allocation was a mere Rs 11 crore.

The allocation for PLI scheme for large-scale electronics manufacturing has been increased from Rs 5,747 crore to Rs 8,885 crore.

Towards the implementation of DPDP Act 2023, the government has allotted Rs 5 crore for the setting up of the Data Protection Board. The allocation last year stood at Rs 2 crore.

The Budget allocation for most of the MeitY agencies, including National Informatics Centre, Indian Computer Emergency Response Team, Centre for Development of Advanced Computing, and Standardisation Testing and Quality Certification, was marginally higher compared to the previous year.