Budget 2025: What FM Nirmala Sitharaman Announced About AI; Centre Of Excellence, AI-Powered Sectors, More
In the Union Budget 2025, Finance Minister Nirmala Sitharaman made the following announcements with regard to AI, including a Centre of Excellence in AI for education with an outlay of Rs 500 crore.
(Source: NDTV Profit)
Finance Minister Nirmala Sitharaman presented the Union Budget 2025 today, and as anticipated, artificial intelligence was one of the focus areas for the technology sector. With AI projected to contribute $15.7 trillion to the global economy by 2030, tech sector leaders had Budget expectations with regard to subsidies, incentives, or grants developing AI-led solutions and organisations, along with skilling for AI.
Centre of Excellence in AI for Education
In her eighth consecutive Budget speech, the FM announced the setting up of a Centre of Excellence in AI for education with an outlay of Rs 500 crore. The CoE will focus on innovation in the application of AI technologies in education.
AI-Powered Farm Renaissance
The Budget indicated that agriculture is no longer a sector of subsistence, but an AI-driven industry, with applications in natural farming, soil microbiome optimisation to replace chemical fertilizers, autonomous drone-based seeding, multi-spectral crop monitoring, harvesting, watershed management and desalination-to-irrigation systems. In addition, AI-optimised farm-to-fork supply chains include direct-to-consumer food processing and AI-powered global agriculture exports.
AI-Powered Learning
The Budget covered areas such as vocational AI-led apprenticeships, national AI-based skill matching, and project-based assessments to fulfil AI-led industry demand.
AI-Enabled Energy System
The Budget noted that by 2030, India will be the only major economy with a 100% AI-optimised renewable grid, enabling AI-led energy balancing across solar, wind, nuclear, biofuels, and hydrogen, AI-powered Small Modular Nuclear Reactors and Thorium fuel plants, and AI-driven hydrogen electrolysers.
AI In Manufacturing
AI-native factories will feature Agentic AI-powered production lines, digital twins in factories, edge AI-optimised quantum-encrypted logistics.
AI-Powered Global Services Hub
India will shift beyond traditional BPO to agentic AI handling global business operations from India, self-learning, no-code enterprise AI systems replacing traditional software, AI-powered consulting, strategy, and decision support services for global businesses.
AI-Optimised Governance
The Budget also noted that AI-led fiscal policy will eliminate tax leakages through autonomous revenue intelligence, ensure a current account surplus via AI-led exports, and globalise the Rupee through AI-powered fintech and trade.
Agentic AI
Agentic AI—self-learning, decision-making AI systems—will accelerate productivity, drive innovation, and position India as the world’s first truly autonomous economic powerhouse.
AI-Powered Insurance Ecosystem
She also spoke about enabling the world’s largest AI-powered insurance ecosystem, offering hyper-personalised, on-demand coverage for citizens, along with catalysing AI-led risk modelling, quantum-encrypted financial security, and real-time claims processing.
Other AI-Powered Sectors
The FM talked about creating AI-optimised, 100% renewable, ultra-low-cost energy, along with AI-driven supply chains, and quantum-encrypted logistics, AI-enabled fintech, and AI-native, no-code, high-margin consulting and digital enterprises.
Earlier, the Economic Survey 2025 has also highlighted the crucial need for boosting AI in India. The Survey said, "It will also require appropriate skilling and education for India’s youth to take advantage of technological advances such as Artificial Intelligence, enabling its population to stay one step ahead of technological developments. That would minimise or even eliminate the potential adverse impact on employment and, if possible, turn it into a force for augmenting employment. It would require a departure from ‘business as usual’ for collaboration between academic institutions and businesses."
The government has already implemented a number of proposals on boosting the role of technology in the economy. The Survey said," Policy action on this front is already underway, with recent budgets reflecting a clear focus on a technology-driven economy. This includes establishing Artificial Intelligence Centres of Excellence (CoE) at top educational institutions across India and the announcement of a Rs 1 lakh crore financing corpus to catalyse private sector innovation and R&D in sunrise sectors."
