Budget scrutiny exposes MeitY’s stalled semiconductor and AI schemes, weak fund utilisation, and low R&D spending, raising concerns over execution capacity.
A parliamentary committee has raised concerns over persistent underutilisation of funds and delays in implementing major technology programmes under the Ministry of Electronics and Information Technology (MeitY), including the semiconductor initiative and production-linked incentive (PLI) schemes.
The Standing Committee on Communications and Information Technology, chaired by BJP MP Nishikant Dubey, presented its 24th report on the ministry’s budget demands for 2026–27 in Parliament on Monday, March 16, 2026.
The panel noted that India’s expenditure on research and development (R&D) remains low at 0.64% of GDP, far below the global average of 2.5-5% seen in countries such as the US, China and Israel.
The committee observed that the ministry attributed delays to the early stages of programme implementation, with initial efforts focused on building institutional frameworks.
However, it warned that challenges in establishing a sovereign AI model remain significant, citing high hardware costs, supply chain delays, and the resource demands of data centres.
Under the India AI Mission, launched in March 2024 with an outlay of ₹103.72 billion, the government has so far made 38,000 GPUs available to researchers and startups at subsidised rates, funded the development of sovereign AI models, and streamlined access to non-personal datasets.
Plans are underway to expand compute capacity to 100,000 GPUs by the end of 2026.
The committee also reviewed the semiconductor programme, aimed at building domestic chip manufacturing capacity. It noted that fund utilisation has been slower than expected, with delays linked to the complexity of projects and the time required to finalise agreements. The ministry acknowledged that semiconductor manufacturing is at a nascent stage and requires sustained investment.
Similarly, PLI schemes for electronics and IT hardware have seen gaps between budget projections and actual disbursements, as incentive claims depend on companies meeting investment and sales thresholds.
The panel concluded that while initiatives are progressing, stronger execution and higher R&D investment are essential to achieve India’s technology ambitions.
