Budget 2025: Prioritise AI research and reduce GST on upskilling programmes, say experts

As Information Technology (IT) companies are increasingly focusing on Artificial Intelligence (AI) and Generative AI use cases, experts say the upcoming budget should promote AI research and implementation apart from focusing on upskilling programmes.

In the Interim Budget, Finance Minister Nirmala Sitharaman had announced that three centres of excellence for Artificial Intelligence would be set-up in top educational institutions.

Hari Krishnan Nair, Co-Founder, Great Learning, said India has been a vital hub for outsourcing services.

"With the increasing number of global companies establishing their Global Capability Centres (GCCs) in India, equipping our workforce with cutting-edge skills not only enhances employability but also positions India as a preferred destination for high-value projects and international business operations."

He hopes that in the upcoming budget, the government takes measures to reduce Goods and Services Tax (GST) on upskilling and reskilling programmes.

"Incorporating upskilling programmes into educational loan schemes is crucial. Currently, these programmes do not fall under the purview of educational loans, resulting in higher interest rates for learners," he added.

As per NASSCOM report, India is estimated to have over 1,900 GCCs by 2025 with a market size of $60 billion. The report points out that given the competitive talent market, availability, attraction and retention of niche talent, building a pipeline of readily deployable talent with the new emerging skills, finding and nurturing, talent equipped for global leadership positions and cost arbitrage have emerged as key challenging factors facing GCCs in India.

Top IT companies are training their workforce in emerging technologies including Gen AI.

Veerasundar V, Chief Financial Officer, Simplilearn said the government should reconsider the 18% GST on educational products as it would ease the burden on middle-class families.

Apart from skilling programmes, there is also a requirement of robust infrastructure investments in high-speed internet and data centres.

"Clear tax breaks and incentives for R&D (Research and Development) coupled with the creation of innovation hubs will incentivise IT companies to invest heavily in cutting-edge research. This will foster a culture of innovation, propel India to the forefront of tech breakthroughs, and ultimately translate to higher valuations for Indian IT firms," said Somdutta Singh, Serial Entrepreneur, Founder and CEO, Assiduus.

An agenda on the budget should include a segment for incentivising companies to bridge the gap between industry requirements and the existing talent pool.

Constant upskilling and reskilling initiatives will keep the workforce relevant predominantly in sectors undergoing rapid technological changes, said Ankit Aggarwal, Founder and CEO of Unstop.