By: Vivek Surve, AI Expert and Founder, Oreo One Digital

India stands poised at the cusp of an AI-powered revolution, with the potential to transform its economy and society. The upcoming Union Budget 2025-26 presents a critical opportunity to nurture this burgeoning sector and solidify India’s position as a global AI leader. This budget holds the key to unlocking the full potential of AI, from driving economic growth and improving public services to addressing societal challenges. By strategically investing in research and development, cultivating a skilled AI workforce, and fostering a conducive ecosystem for innovation, the government can propel India to the forefront of the global AI race. We are anticipating key areas where the government can intervene to maximise the impact of AI on the nation’s progress, focusing on crucial aspects such as research and development, talent development, data infrastructure, and ethical considerations.

Key Expectations:

1. Research & Development (R&D) Incentives:
   • Dedicated AI Research Fund: The government should establish a dedicated fund to support cutting-edge AI research across academia and industry. This fund can incentivise collaborative projects between researchers, startups, and established companies, fostering innovation and accelerating breakthroughs in areas like deep learning, natural language processing, and computer vision.
   • Tax Breaks for AI-focused R&D: Providing tax breaks to companies investing heavily in AI research and development will encourage innovation and attract foreign investment in the sector. Additionally, the government could consider establishing “AI innovation zones” offering preferential tax treatments and regulatory sandboxes to encourage experimentation and attract AI companies.
2. Skilling & Talent Development:
   • AI-focused Education Programs: The budget should prioritise initiatives to upskill the Indian workforce in AI, machine learning, and data science. This could involve expanding access to AI-focused educational programs in universities and colleges, promoting online learning platforms, and encouraging industry-academia collaborations for skill development.
   • Attracting Global AI Talent: It is crucial to implement policies to attract and retain top AI talent from around the world. These could include streamlining visa processes for skilled AI professionals, creating incentives for foreign researchers and entrepreneurs to establish themselves in India, and fostering a welcoming and supportive environment for international AI talent.
3. Data Infrastructure & Accessibility:
   • Open Data Initiatives: The government should continue to promote open data initiatives and ensure the availability of high-quality, accessible datasets for AI research and development. This will empower researchers and businesses to develop innovative AI solutions for various societal challenges.
   • Data Governance Framework: It is crucial to establish a robust data governance framework that balances data privacy with the needs of AI innovation. Clear guidelines and regulations will foster trust and encourage responsible AI development. This framework should also address issues related to data security, ownership, and cross-border data flow.
4. AI-Powered Solutions for National Priorities:
   • Healthcare: The budget should allocate resources to leverage AI in healthcare, such as improving disease diagnosis, developing personalised medicine, and enhancing healthcare delivery systems through telemedicine and remote patient monitoring.
   • Agriculture: AI can revolutionise agriculture through precision farming, crop yield prediction, and early disease detection. The budget should incentivise the development and deployment of AI-powered solutions in this sector, such as drones for crop monitoring, AI-powered irrigation systems, and predictive analytics for crop yields.
   • Infrastructure: AI can optimise infrastructure development, improve traffic management, and enhance disaster response. The budget should allocate funds for AI-driven solutions in these areas, such as smart city initiatives, predictive maintenance for infrastructure, and early warning systems for natural disasters.
5. Addressing Ethical Concerns:
   • AI Ethics Research & Development: The government should allocate funding for research and development in AI ethics, including issues such as bias, fairness, transparency, and accountability.
   • Developing Ethical Guidelines: Establishing clear ethical guidelines for the development and deployment of AI systems is crucial to ensure responsible and trustworthy AI. These guidelines should address issues such as data privacy, algorithmic bias, and the potential impact of AI on employment and social equity.

The 2025-26 Union Budget presents a pivotal moment for India to embrace the transformative power of AI. India can unlock its full potential as an AI superpower by prioritising strategic investments in research and development, nurturing a skilled AI workforce, and fostering a responsible and ethical AI ecosystem. This will drive economic growth and create new opportunities for innovation. It will also address critical societal challenges, improve the quality of life for its citizens, and position India as a global leader in the emerging era of artificial intelligence. The success of these initiatives will depend on strong government leadership, collaboration between academia, industry, and the government, and a commitment to responsible AI development. The future of India hinges on its ability to harness the power of AI for the benefit of all its citizens.