Finance minister Nirmala Sitharaman unveiled a set of forward-looking initiatives as part of the budget proposals on Tuesday, operationalising a ₹1 lakh crore research fund that experts said will help work in next generation technologies and announce a new fund for innovation in the space sector.

The budget, presented for the fiscal year 2024-25, also has plans to expand digital infrastructure, advance nuclear technology, and secure critical minerals essential for high-tech manufacturing.

“We are determined to ensure that all Indians, regardless of religion, caste, gender and age, make substantial progress in realising their life goals and aspirations,” Sitharaman said, setting the tone for a budget focused on long-term growth and innovation.

Part of this push was in the space sector, which appears to capitalise on India’s recent successes in space exploration. The government earmarked funds to dramatically expand the country’s space economy.

“With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of ₹1,000 crore will be set up,” Sitharaman declared.

Winnie Shekhar, partner at INDUSLAW, said the “ ₹1,000 crore venture capital fund will significantly impact India’s space sector by providing essential financial support for research and development of advanced space technologies”.

“This move is expected to boost private sector participation, create high-skilled jobs, and drive innovation across various industries (space and beyond), positioning India as a major player in the global space economy,” Shekhar added.

The budget allocates ₹10,088 crore for space technology and ₹1,612 crore for space applications, demonstrating a substantial increase in funding for the space sector over the previous financial year, when, according to revised estimates, there ₹8,180 crore and ₹1,526 crore were allotted to the sector.

The minister’s plans also appeared to target critical minerals in order to secure the future of tech manufacturing.

“We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets,” Sitharaman stated. The mission’s mandate will include technology development, skilled workforce creation, an extended producer responsibility framework, and a suitable financing mechanism.

These initiatives are crucial for ensuring a steady supply of minerals essential for high-tech manufacturing, including semiconductors, batteries, and renewable energy technologies.

Hitesh Garg, VP and India managing director, NXP Semiconductors, welcomed what he said was “strong support for the semiconductor and electronics manufacturing sector”. “The government’s significant increase in funding for semiconductors, along with the enhanced PLI allocation under Meity, shows a strong commitment to fostering a thriving ecosystem for technological progress,” Garg said.

For the programme for development of semiconductors and display manufacturing ecosystem, the budget proposed to allocate ₹6,903 crore, as compared to ₹1,503 crore allotted in the previous financial year, according to revised estimated. In the 2023-24 period, the government had initially budgeted ₹3,000 crore but appeared to have utilised half the amount for the purpose.

Sitharaman also announced the decision to operationalise the “Anusandhan National Research Fund”, which was unveiled as part of a law on national research enacted in 2023 for basic research and prototype development. “Further, we will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore in line with the announcement in the interim budget,” the finance minister said.

Experts hailed this move and said some of these will go to future technologies. “Though there are multiple announcements which will benefit the startup ecosystem generally, the industry was hoping for more a dedicated focus for AI and deep tech which will hopefully now come from the R&D initiatives that have been announced,” said Ranjana Adhikari, partner, INDUSLAW.