THE Union Budget, it is often said, is not just about taxes, revenues and sectoral allocations, but it is also about new policy directions and a reflection of the government’s thinking in crucial sectors. Given that the world is witnessing rapid changes in the technological arena linked with new geopolitical realities, one would have expected this year’s Budget to reveal India’s response to these emerging challenges.
On this count, the Budget speech was disappointing. Far from being a “futuristic Budget”, as is being claimed, it looks like “business as usual” on major science and technology fronts like artificial intelligence (AI) and semiconductors.
Among the key science and technology-related announcements made by Finance Minister (FM) Nirmala Sitharaman are the setting up of new telescopes and a planetarium, the creation of rare earths corridors, the launch of part two of the semiconductor mission, and a strategy for biopharma manufacturing. These are all the right things to do, but they do not amount to a policy shift as they are all projects with incremental forward movement.
The Indian Institute of Astrophysics (IIA) has been working on the development of the National Large Solar Telescope for 15 years and the National Large Optical-infrared Telescope for over five years. These two are among the projects announced in the Budget. Major work, such as designing, site selection, development of a testbed laboratory and scientific capacity-building for the solar telescope, has been underway for a long time. The FM herself visited the site selected for setting up the large solar telescope in Ladakh last year.
India has a strong scientific capability in solar observation, and the proposed solar telescope is going to complement observations from Aditya-L1 satellite and ground-based Multi-Application Solar Telescope at Udaipur.
The new telescope projects will cost an estimated Rs 3,500 crore, but the IIA has not received any extra budgetary support for the new projects announced. The IIA is one of the 25 autonomous bodies under the Department of Science — all of which together get Rs 1,623 crore in the Budget.
Another initiative the minister announced is Biopharma SHAKTI (Strategy for Healthcare Advancement through Knowledge, Technology and Innovation) with an outlay of Rs 10,000 crore over the next five years to build facilities for the production of biologics and biosimilars. However, the money would go for the creation of three new National Institutes of Pharmaceutical Education and Research (NIPERs) and a network of over 1,000 accredited clinical trial sites — both of which are general-purpose activities and not dedicated to biopharma alone.
The third component of the proposed outlay is to strengthen the Central Drugs Standard Control Organisation. It is much needed but clubbing it under the biopharma strategy is rather strange. It is unclear how much of Rs 10,000 crore would go for developing new NIPERs or strengthening the regulatory system, and the development of biopharma as such.
In any case, SHAKTI is a follow-up action of the $250-million National Biopharma Mission launched with aid from the World Bank in 2017. It was focused on scientific research, startups and developing clinical trial sites for vaccines, biosimilars and medical devices. It promoted early-stage bio-manufacturing, clinical development, training and technology transfer.
The Budget speech also touched upon the hot topics of semiconductors, rare earths and AI, but none of the mentions merit the tag of a game-changer. Reiterating that a scheme for manufacturing Rare Earth Permanent Magnets was launched in November 2025, the minister talked of a proposal to support Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated “Rare Earth Corridors” to promote mining, processing, research and manufacturing. This is pretty much one of the broad goals of the National Critical Minerals Mission launched last year, and other initiatives to boost rare earths exploration and processing.
While announcing the India Semiconductor Mission (ISM) 2.0, the FM said it would focus on producing “equipment and materials, design full-stack Indian Intellectual Property, and fortify supply chains”. Here too, she merely said what the Minister for Electronics & IT Ashwini Vaishnaw, stated last week. He said the target for the production of advanced chips (in 2-3 nanometre mode) for use in smartphones, defence equipment and computing devices was 2032. In the previously announced second phase of the Design-Linked Incentive (DLI) scheme, the focus will be on chip categories such as compute, radio frequency, networking, power, sensor and memory.
The tax holiday till 2047 for foreign companies setting up data centres in India is highly problematic. Data centres are power guzzlers. That’s why tech giants like Meta, Google and other AI companies want to set them up at offshore locations in India and elsewhere.
The other big-ticket idea that featured in the minister’s speech in the past several years — the Anusandhan National Research Foundation (ANRF) — got only a cursory mention this time. The government had promised Rs 50,000 crore for the ANRF over five years, but it got a meagre Rs 2,000 crore last year, and gets the same this year. Another big idea was the Research, Development and Innovation (RDI) scheme announced last year to fund deep tech projects in the private sector. It is supposed to get Rs 1 lakh crore over seven years. It was allotted Rs 20,000 crore last year, but only Rs 3,000 crore could be spent as the scheme was approved by the Cabinet only in July, and rules were formed by November last year.
Despite low utilisation of funds and tardy implementation of the RDI, the budgetary allocations mark a clear shift from the public to private in research funding. The ANRF, which supports research in government labs and universities, gets Rs 2,000 crore, and the RDI — set up solely for the private sector — gets 10 times more.
In effect, the research kitty for public institutions has shrunk and not grown as was promised when the ANRF was floated as an umbrella research funding agency replacing the Science and Engineering Research Board. This is a silent but worrying signal from the science and technology budget this year.