The Parliamentary Standing Committee on Communications and Information Technology has flagged funding cuts, underutilisation of allocations, and execution gaps in the Ministry of Electronics and Information Technology’s (MeitY) push on artificial intelligence (AI) and semiconductors.
The panel noted that MeitY’s overall allocation for financial year 2026-27 has been reduced to Rs 216.32 billion, a 17 per cent cut from Rs 260.26 billion in financial year 2025-26.
Key programmes have seen sharp reductions within this. The committee observed that the semiconductor laboratory (SCL) and the India AI Mission have seen fund cuts of 16 per cent and 50 per cent respectively, alongside a Rs 50 billion reduction in the modified programme for development of semiconductors and display manufacturing ecosystem.
On the India AI Mission, the panel flagged both funding and utilisation concerns. It noted that MeitY had spent only 32 per cent of the funds allocated at the revised estimate stage in financial year 2025-26, and that the budget estimate for financial year 2026-27 is only half of what MeitY had proposed. Against a proposed Rs 20 billion for 2026-27, only Rs 10 billion was allocated, while actual expenditure stood at Rs 2.56 billion as of December 2025.
The committee also raised broader concerns around execution and ecosystem readiness. Members flagged the slow transition of the modified programme for semiconductors from project approval to actual disbursement, as well as delays in the procurement of 10,000 GPUs promised under the India AI Mission.
Beyond funding and implementation, the report points to structural weaknesses in India’s deep-tech ecosystem, including a lack of upfront industry support for sharing domain knowledge, testing, and commercialisation, as well as the absence of Indian and international standards acting as a barrier to progress.
The panel further noted that India’s gross expenditure on research and development as a percentage of GDP stands at 0.64 per cent, below the global average, raising concerns over the country’s long-term innovation capacity in AI and advanced electronics.
