Union Budget 2025 set to boost AI, Data Security and Privacy initiatives

February 4, 2025
Union Budget 2025

By Anuradha Gandhi and Rachita Thakur

Introduction

India’s Digital growth has positioned it as a global tech hub. The Union Budget 2025 (hereinafter referred to as the “Budget”) strengthens this momentum by outlining a strategic roadmap to enhance the Country’s technological capabilities with increased funding for Artificial Intelligence, Digitization of Records, Capacity Building, Centers of Excellence, Cyber security and Data Protection initiatives.

MietY receives a budgetary boost

The Ministry of Electronics and Information Technology (MeitY) has received a 48% budget increase with allocation of INR 26,000 crore (260,000 million), to strengthen the IndiaAI Mission and expand production linked incentive schemes for semiconductors, electronic, and IT hardware. A large portion of the budget will fund semiconductor development, with INR 3,900 crore (39,000 million) allocated for the ‘Modified Scheme for Setting up Semiconductor Fabs and Related facilities’ up from INR 2500 crore (25,000 million) in FY24. MeitY also oversees key public sector undertakings, including the National Informatics Centre, Centre for Development of Advanced Computing and Indian Computer Emergency Response team. The ministry is also in-charge of the IndiaAI mission which aims to strengthen India’s AI Infrastructure.[1]

Key allocations for the development of AI, Cybersecurity, Digitization and Data Privacy

I. Cyber-Security and Data Protection

  1. Data Protection Board – The MeitY has significantly increased the budget allocation for the Data Protection Boards of India to INR 5 Crore (50 million) for FY 2025-2026, marking a 2.5 times rise from the previous year’s INR 2 crore (20 million) allocation. Of this amount, INR 50 lakh (5 million) is earmarked for Capital Expenditure, which includes the development of a digital portal while INR 4.5 Crore (45 million) is allocated for revenue expenditure, covering salaries and other operational expenses.[2] The Data Protection Board is essential for implementing the Digital Personal Data Protection Act, 2023. It will be composed of a Chairperson and members, whose appointments and salaries will be decided by the Central Government. The board will have the authority to direct data fiduciary to take corrective or preventive actions in the event of a personal data breach or intervene when a user files a complaint.[3]
  2. Cyber Security Projects – The budget has allocated INR 1900 crore (19,000 million) for Cybersecurity initiatives, marking an increase from INR 1600 Crore (16,000 million) in the previous budget. This rise is in response to the growing risks posed by digital frauds and cybercrimes to India’s Financial and National Security.
    • Cybersecurity Capital Projects have been allocated INR 782 crore (7,820 million), up from INR 759 crore (7,590 million) last year
    • Indian Computer Emergency Response Team (CERT-In) has been allocated INR 255 crore (2,550 million), a rise from INR 238 crore (2,380 million) last year.
    • Cybersecurity initiatives focusing on women and children has been allocated INR 44.39 crore (443.9 million), a decrease from INR 52.85 crore (528.5 million) in the previous year.
    • National Mission on Interdisciplinary Cyber-Physical Systems received INR 900 crore (9,000 million), a major increase from INR 564.46 crore (5644.6 million) last year

    The increased funding supports the government’s efforts to address rising cyber threats, as highlighted by the Prime Minister as he warned of the growing incidence of online frauds, citing over INR 11,300 crore (113,000 million) in losses from stock trading scams and digital impersonation last year, according to the Indian Cyber Crime Coordination Centre. With online financial frauds comprising of 67.8% of cyber complaints, the need for enhanced protective measures is urgent.[4]

  3. II. Allocation for Digitization of Records and Data

  4. National Geospatial Mission – The government will launch an INR 100 Crore (1,000 million), National Geospatial Mission to modernize land records, enhance urban planning, and digitize infrastructure project using GIS mapping.[5] Formerly known as the Natural Resources Data Management System (NRDMS), it is a national mission aimed at advancing geospatial science and technology in India.[6]
  5. III. Allocations for development of Artificial Intelligence

  6. Centre of Excellence in Artificial Intelligence – The Government will set up a new Centre of Excellence in AI within the education sector, with a capital outlay of INR 500 Crore (5,000 million) in addition to the three previously approved Centers for agriculture, health and sustainable cities in 2023.[7] The previously approved Centers have been allocated INR 200 Crore (2,000 million) which is an 82% increase from last year.[8] These Centers of Excellence will drive interdisciplinary AI research, developing advanced applications and scalable solutions in key sectors. They will collaborate with industry, academia, and stakeholders to advance India’s AI vision and AI driven products with significant societal impact.[9]
  7. India AI Mission – The government has allocated INR 2000 Crore (20,000 million) for the mission in FY 2025-26, reflecting a 1056% increase from the INR 173 Crore (1,730 million) allocated in FY 2024-25. Under this mission, start-ups and researched can access subsidized Graphic Processing Units (GPUs) to support the development of a homegrown AI model. It aims to create a robust AI ecosystem by democratizing computing access, enhancing data quality, fostering industry collaboration supporting startups, promoting ethical AI and ensuring societal impact.[10]
  8. Total Budgetary Allocation for AI initiatives – The Finance Ministry has allocated a total of INR 4349.75 crore (43,497.5 million) to schemes that directly or indirectly involve AI.[11] This includes:
    1. IndiaAI Mission
    2. Center of Excellence in AI for education, agriculture, health and sustainable cities
    3. National Mission on Interdisciplinary Cyber Physical Systems
    4. Research and Development initiatives for Information Technology and Electronics
  9. Deep Tech Fund of Funds – INR 20,000 Crore (200,000 million) has been allocated for research, development and innovation. This allocation includes creation of a “Deep tech Fund of Funds” aimed at accelerating the growth of next generation of startups encompassing emerging technologies like AI, Robotics and Quantum Computing[12].
  10. IV. Key Policy Initiatives

  11. Centralized KYC registry – The government expressed their plans for the rollout of a revamped Central Know Your Customer Registry. This initiative aims to simplify and unify KYC Process across various financial sectors. The system, managed by Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), will be upgraded to CKYCCR 2.0, enabling more efficient processes and direct citizen access. The Centre has also proposed data protection measures as KYC identifiers will now be masked, and access to records will be regulated through unique IP-based authorization, ensuring better safeguarding of customer data against misuse. It aims to establish CKYC as the ‘single source of truth’ for KYC verification. [13]
  12. Private Sector Access to PM Gati Shakti’s Data– Data layers on railways, highways, logistics parks, warehouses, airports, and more will be shared with Private Sector to support logistic management, smart city solutions, disaster management, healthcare planning, agriculture and food distribution.[14] The initiative, developed as a Digital Master Planning tool by BISAG-N, is a GIS-based platform integrating action plans from all Ministries and Departments. It enables real-time dynamic mapping of Infrastructure projects, hosted securely on MEGHRAJ i.e., Cloud of Govt. of India.[15]

Prateek Chandgothia, Assessment Intern at S.S. Rana & Co. has assisted in the research of this article.

[1] https://economictimes.indiatimes.com/industry/cons-products/electronics/a-foundation-course-for-desi-musks-govt-boosts-budget-for-electronics-and-ai/articleshow/117850182.cms?from=mdr

[2] https://www.indiabudget.gov.in/doc/eb/sbe27.pdf

[3] https://www.hindustantimes.com/business/union-budget-it-ministry-allocates-5-crore-for-data-protection-board-in-fy26-101738394752701.html

[4] https://www.cnbctv18.com/budget/union-budget-2025-allocates-over-%E2%82%B91900-crore-for-cybersecurity-amid-rising-digital-frauds-19550947.htm

[5] https://theprint.in/india/budget-2025-rs-100-crore-national-geospatial-mission-to-boost-infrastructure-mapping-modernise-land-records/2474788/

[6] https://dst.gov.in/national-geospatial-programme-erstwhile-nrdms

[7] https://www.livemint.com/technology/tech-news/union-budget-2025-fm-nirmala-sitharaman-announces-rs-5-000-crore-ai-centre-of-excellence-in-education-11738389316268.html

[8] https://currentaffairs.adda247.com/ai-in-focus-key-allocations-in-union-budget-2025/

[9] https://www.education.gov.in/sites/upload_files/mhrd/files/Call-for-Proposal.pdf

[10] https://indiaai.gov.in/

[11] https://currentaffairs.adda247.com/ai-in-focus-key-allocations-in-union-budget-2025/

[12] https://www.downtoearth.org.in/science-technology/budget-2025-26-major-boost-to-scientific-research-with-rs-20000-crore-outlay

[13] https://www.cnbctv18.com/budget/budget-2025-govt-to-revamp-central-kyc-tighten-data-security-measures-19551006.htm

[14] https://www.business-standard.com/budget/news/govt-to-share-selected-data-maps-from-pm-gati-shakti-with-pvt-sector-fm-125020101508_1.html#:~:text=on%20the%20platform.-,The%20minister%20also%20announced%20to%20start%20a%20National%20Geospatial%20Mission,infrastructure%20projects%2C%22%20she%20said.

[15] https://ne.pmgatishakti.gov.in/DoNER/about_pmgati

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