Shedding Light on Start-ups in the Union Budget 2023
The Indian government’s Budget 2023 is set to focus on startups and Technology to enable India to become a global leader in technology, digital innovation, and start-ups.
Finance Minister Nirmala Sitharaman presented the 2023–2024 Union Budget. This fiscal year’s union budget, like previous ones, places a significant emphasis on emerging technologies like 5G and fintech. However, there was no mention of cryptocurrencies in the budget.
An overview of budget announcements involving technology and startups is shown below:
Agricultural Technology
The government is set to create a digital public infrastructure for the agricultural business that will function as an open-source digital public good and encourage the expansion of the agritech sector and entrepreneurs.
What was also announced was that the government will establish an agriculture accelerator fund for young businesspeople to support the firms that are emerging from rural areas.
The goal is to support farmer-focused solutions that leverage information services for crop planning and health, improved access to agricultural supplies, loans, and insurance, crop estimation.
These steps will eventually advance agritech firms and the sector as a whole. The change intends to boost the agricultural industry by introducing more advanced technologies and cost-effective, creative solutions.
Green Mobility
The import of capital goods and machinery necessary for the production of lithium-ion cells for batteries used in EVs is now exempt from customs duties, giving the industry a boost.
According to industry experts, the abolition of customs duty and the extension of relief for Li-ion cells will lower the cost of EV batteries, promoting the uptake of EVs.
However, other EV players also wanted the government to expand its FAME program, which received no mention in the article.
5G Technology
The government is trying to tap into the fifth-generation mobile network for various industries given that telecom companies like Airtel and Reliance Jio have already started rolling out 5G services. 100 labs will be established by the government to create 5G-based applications. These apps will address the uses of intelligent transportation systems, precision agriculture, smart classrooms, and healthcare.
Artificial Intelligence
As many as three centers of excellence for AI have been planned for establishment by the government as part of the “Make AI in India and Make AI work for India” initiative. This is consistent with the nation’s IT industry’s quest for and expectation that advancements in AI will dominate technological developments in 2023.
According to the Finance Minister, this decision will contribute to the realization of the slogan “Make AI in India, Make AI work for India.” The development of AI-based solutions will primarily target the agricultural, healthcare, and sustainable city sectors.
Drones
Through the “Drone Shakti” program, which involves developing a variety of applications and utilizing drone-as-a-services, the government is also promoting drone businesses (DrAAS). Select ITIs in all states will soon begin offering the necessary skill-building courses.
Additionally, the government will promote the use of “Kisan Drones” for tasks including crop evaluation, digitization of land records, and application of nutrients and insecticides.
Under the Pradhan Mantri Kaushal Vikas Yojana 4.0, which will help the drone industry, the government will train tens of thousands of young people over the next three years in topics like drones, AI, coding, and other soft skills.
Regarding drone pilot training and the development of other related skills, the drone sector has been requesting assistance.
Start-Ups
The government unveiled several initiatives supporting the startup and technology industries, such as extending the deadline for firms to incorporate to qualify for income tax incentives.
Industry analysts warned that the measures would only apply to less than 1% of the 84,000 companies registered with the Department for Promotion of Industry and Internal Trade even as the government sought to broaden the scope of tax sops granted to firms qualifying under the Startup India scheme (DPIIT).
Additionally, the amended plan for establishing semiconductor fabs in India has been given a budgetary allocation of Rs 1,000 crore, while the plan for establishing display fabrication facilities in India has been given a budgetary allocation of Rs 4 lakh.
The overall benefit for start-ups
The government’s initiatives to fund centers of excellence in AI, construct 5G development labs, enhance research funding in important areas, and place a strong emphasis on green growth and the energy transition will benefit Indian IT businesses.
Additionally, organizations can now benefit from the carry-forward of losses on changes in startup shareholding from seven to ten years after incorporation. In addition, efforts to make know-your-customer processes simpler will use a risk-based strategy rather than a one-size-fits-all approach to accommodate startups and smaller industry players while letting business owners concentrate on R&D and their goods.
Conclusion
Despite increased inflationary pressures brought on by rising food and fuel costs globally, it is anticipated that India’s gross domestic product (GDP) will grow by 6.9% in fiscal year (FY) 2022–2023 and 6.2% in FY 2023–2024. Since GDP is a key factor in a nation’s economic development, if we continue to support and encourage more start-up endeavors, it will be possible to raise domestic revenue and consumer money can also flow throughout the country.
Additionally, startups develop cutting-edge products and technologies that improve people’s quality of life. In India, a large number of startups are working in rural areas to assist the local community as a whole, including the local economy.
