The Union Budget 2025-26 has allocated ₹20,000 crore to strengthen India’s research and development (R&D) ecosystem, with a focus on AI, geospatial technologies, and innovation initiatives. The budget also aims to foster scientific temper by expanding the Atal Tinkering Labs program to establish 50,000 labs across the country over the next five years.
Industry Reactions to R&D Investments
“The ₹20,000 crore allocation for private and public sector-driven research, AI, and geospatial initiatives demonstrates the government’s strong commitment to innovation-led growth,” said Shirshendu Mukherjee, Managing Director, Wadhwani Innovation Network, in an interview with PTI. He added that nurturing young creativity and advancing deep tech research will accelerate digital transformation and position India as a leader in emerging technologies.
To sustain this momentum, Mukherjee emphasized the importance of industry-academia collaboration, commercialization of research, and scalable funding models.
Ajay Kela, President and CEO of the Wadhwani Foundation, told PTI that five National Centres of Excellence for Skilling will be established. He added that the ₹500 crore allocated for AI-driven education will enhance workforce readiness and future job opportunities.
Energy and Research Incentives
The budget’s support for small modular reactor research and energy capacity augmentation is expected to open new opportunities for energy-intensive industries, according to Dushyant Chachra, CFO of SAEL. However, he noted that further regulatory streamlining and tax incentives will be necessary to maintain momentum.
Calls for Enhanced Tax Incentives and Corporate R&D
Vishwanathan Iyer, Director of Accreditation at the Great Lakes Institute of Management, told PTI that deeper tax incentives are needed to encourage corporate R&D spending. He suggested that weighted deductions and public-private partnerships could accelerate innovation across sectors.
Similarly, Bharat Kale, Emeritus Scientist and Director of Material Science at MIT World Peace University, pointed out that India’s R&D expenditure remains lower than that of countries like China, Japan, and Korea. Kale emphasized the need to increase private sector participation and investment in research.
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Massive Increase in Science and Technology Budget
The Department of Science and Technology (DST) received a budget increase to ₹23,290 crore, up from ₹2,819 crore last year. This funding will support quantum computing, supercomputing, and geospatial projects, according to Sourabh Kulshrestha, Dean of R&D at Shoolini University.
