The Indian government will establish Centres of Excellence in Artificial Intelligence with a total investment of ₹500 crore. The Budget 2025 offers Rs 500 crore for AI centres, aiming to enhance research and development in artificial intelligence across India. Each centre will receive ₹100 crore for development, Finance Minister Nirmala Sitharaman announced while presenting the Union Budget 2025. These centres aim to advance AI education and research, strengthening India’s digital capabilities.
The government plans to add 75,000 new medical seats over five years. Over the last decade, undergraduate and postgraduate medical seats have doubled, reaching a total increase of 1.1 lakh. In the next phase, 10,000 additional medical seats will be introduced by next year to enhance healthcare education.
AI’s Impact on the Workforce
The Economic Survey 2024-25 highlighted AI’s effect on India’s workforce, particularly in low-skilled jobs. The report stressed the need for strong institutions to help workers transition to roles where AI can enhance productivity instead of replacing human efforts. The survey also noted that India’s large population and relatively low per capita income make AI’s impact more pronounced.
With a focus on digital expansion, the Budget 2025 offers Rs 500 crore for AI centres to equip students with future-ready skills. Experts have welcomed the ₹500 crore allocation for AI Centres of Excellence. Rahul Subramaniam, Co-founder of Athena Education, called the initiative a forward-thinking move for India’s education sector. He emphasized that the budget’s focus on accessibility, skill development, and technological integration will help students gain future-ready skills.
The government is also expanding IITs and medical colleges to improve both quality and capacity. This initiative aims to position education as a key driver of national growth.
Strengthening the Workforce
The Union Budget 2025-26 takes a bold step in strengthening AI research and medical education. The ₹500 crore allocation for AI Centres of Excellence is a major investment in digital innovation.
Recognizing AI’s growing impact, the Budget 2025 offers Rs 500 crore for AI centres to foster innovation and technological advancements. The budget proposes five National Centres of Excellence for Skilling and a 6,500-seat expansion in IITs. The government has also introduced 10,000 scholarships under the PM Research Fellowship to develop a skilled, tech-savvy workforce that meets global industry demands.
This budget marks India’s first significant step in integrating generative AI into education. By transforming educational institutions into research hubs, the initiative aims to move beyond traditional degree-based learning.
Ramani Dathi, Director at TeamLease HCM, noted that the budget aligns workforce readiness with technological advancements. The National Digital Skill Development Mission and AI-driven education platforms will bridge the gap between automation and job opportunities.
Support for Global Student Mobility
Changes in the Tax Collected at Source (TCS) under the Liberalised Remittance Scheme (LRS) will ease financial challenges for Indian students studying abroad. The TCS threshold has been raised from ₹7 lakh to ₹10 lakh, benefiting families managing international education expenses.
Saurabh Arora, Founder & CEO of University Living, called the revisions transformative, highlighting that over 1.3 million Indian students contribute more than $60 billion in outward remittances. The removal of TCS on remittances funded through education loans will reduce financial barriers.
Piyush Kumar, Regional Director at IDP Education, welcomed the move, stating that it will make global education more accessible. The new policy ensures that financial limitations do not prevent students from pursuing opportunities abroad.
The Union Budget 2025-26 reflects the government’s commitment to digital expansion, skill development, and education reforms. These initiatives will enhance India’s global competitiveness in AI, healthcare, and higher education.
