Article: Budget 2025: Startups, gig workers, and AI get a big boost

Economy & Policy

Budget 2025: Startups, gig workers, and AI get a big boost

From a ₹10,000 Cr Fund of Funds to deep tech investments and new schemes for women entrepreneurs, here’s what the finance minister outlined for startups and tech in Budget 2025.
Budget 2025: Startups, gig workers, and AI get a big boost

Presenting her record eighth consecutive Budget in Parliament on Saturday, Finance Minister Nirmala Sitharaman gave a big push to startups and budding entrepreneurs by announcing a new Fund of Funds for them to be set up with a fresh contribution of Rs 10,000 Cr along with the existing one of Rs 10,000 Cr. 

Under the existing Fund of Funds for startups, Alternative Investment Funds (AIFs) have received commitments of over Rs 91,000 Cr, she said. 

The finance minister also announced a new scheme for 5 lakh women, Scheduled Caste and Scheduled Tribes first-time entrepreneurs to provide term loans up to Rs 2 Crore during the next five years. It will incorporate lessons from the successful Stand-Up India scheme and will also offer online capacity building for entrepreneurship and managerial skills, she added. 

The announcement assumes significance as the central government is focusing on promoting innovation through startups.

Centre of Excellence in AI for education 

Sitharaman announced that a Centres of Excellence (COE) in Artificial Intelligence (AI) for education will be set up with a total outlay of Rs 500 Cr. She had earlier announced three such centres for agriculture, health and sustainable cities in 2023. 

She added: “To promote employment and entrepreneurship opportunities in labour-intensive sectors, our government will undertake specific policy and facilitation measures.”

Five national centres of excellence for skilling

The finance minister also announced the setting up of five National Centres of Excellence for Skilling with global expertise and partnerships. 

In July 2024, the Budget announced the Prime Minister's package of five schemes focusing on skill development. 

These centres for skilling will be set up to equip youths with the skills required for ‘Make for India, Make for the World’ manufacturing. The partnerships will cover curriculum design, training of trainers, a skills certification framework, and periodic reviews, she explained.

Expansion and fellowships for IITs, IISc

To improve the quality of research and development in the country, Sitharaman announced the introduction of 10,000 fellowships under the Prime Minister's Research Fellowship Programme, which would be available at institutions like the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc) over the next five years. 

She further said: “Additional infrastructure will be created in the five IITs started after 2014 to facilitate education for 6,500 more students. Hostels and other infrastructure capacity for IIT Patna will also be expanded.”

Govt to explore Deep Tech fund of funds

The finance minister announced that the government would explore a Deep Tech Fund of Funds to catalyse the next-generation startups, aimed at increasing deep tech investment in India. 

Earlier, India’s G20 Sherpa and former NITI Ayog CEO Amitabh Kant talked about a fund of fund for the deep tech ecosystem. He said that the government should focus on two key areas -- creating a fund and launching large-scale challenges that address India's critical needs.

In her Budget 2025 speech, Sitharaman said the government will propose to extend the period of incorporation for startups up to five years. The extension in the period means the emerging businesses would get more time to establish themselves and benefit from government schemes. 

Push to gig workers 

Giving a major push to Gig workers in India, the finance minister announced that one crore Gig workers would get ID cards, which would help them get more social benefits. 

“Recognising their contribution, our government will arrange for their identity cards and registration on the e-Shram portal. They will be provided healthcare under PM Jan Arogya Yojana,” she announced. 

Extension of time limit under Section 80-IAC

Providing major reliefs to startups and entrepreneurs, the finance minister extended the benefit provided to them under Section 80-IAC for five years. Sitharaman said: "It is proposed to extend the benefit provided under Section 80-IAC to startups for another period of five years, i.e. the benefit will be available to eligible startups incorporated before April 1, 2030.

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Topics: Economy & Policy, #Budget2025

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