Union Budget 2025: Govt To Explore Setting Up Fund Of Funds For Deeptech Sector

Terming investment as the third growth engine for transforming India, finance minister Nirmala Sitharaman said that the government will explore setting up a fund of funds (FoF) for the deeptech sector to catalyse the next generation of startups.

However, she didn’t give any additional details about the FoF. 

To further boost research and innovation by the private sector, the FM announced an allocation of INR 20,000 Cr. This was initially announced in the July 2024 budget. 

In the next five years, under the PM’s Research Fellowship Scheme, the government will provide 10,000 fellowships for technological research in IITs and IISCs with enhanced financial support.

It is pertinent to note that R&D has emerged as an important focus area for the government over the last few years. In her previous July 2024 budget, FM Sithrarman announced that the government will operationalise the INR 1 Lakh Cr Anusandhan National Research Fund in FY24.

Among the other announcements made today, FM Sitharaman said that the government will establish a ‘Centre for Excellence’ in artificial intelligence for education and with a total outlay of INR 500 Cr. 

To strengthen the Indian startup ecosystem, the FM proposed setting up a new Fund of Funds (FoFs) for startups with a corpus of an additional INR 10,000 Cr. Sitharaman said that the previous FoF has received commitments of more than INR 91,000 Cr with an investment of INR 10,000 Cr

The FM also extended the incorporation date for startups to avail tax benefits like income tax breaks by 5 years till April 1, 2030.