Emphasizing on the disruptive innovations of the ‘New Economy’ like Artificial Intelligence (AI), the Union Finance and Corporate Affairs Minister, Smt. Nirmala Sitharaman proposed further measures by the Government to take advantage of these new technologies. These were stated in her Union Budget Speech 2020-21, presented in the Parliament on 1st February.
The Finance Minister observed that technologies like Artificial Intelligence (AI), Internet-of-Things (IoT), 3D printing, drones, DNA data storage, quantum computing, etc., are re-writing the world economic order. She noted that India has already embraced new paradigms such as the sharing economy with aggregator platforms displacing conventional businesses. The Minister added that the Government has also harnessed these new technologies to enable direct benefit transfers and financial inclusion on a scale never imagined before.
Reactions to the Union Budget 2020-21 from Industry Experts.
Dr Sangita Reddy, President, FICCI said, The presentation of the budget and the structure that was followed by the Finance Minister was both interesting and all encompassing. In line with the Prime Minister’s vision of ‘Sabka Saath, Sabka Vikas, Sabka Vishwas’, the budget outlined a series of measures to enhance the ease of living for the people of our country and promote welfare of all sections of our society. The building blocks for growth of any economy are the social sectors such as healthcare, education and skill development.
Each of these areas has got due attention with appropriate outlays in the budget and it is commendable that the government has kept its focus on the long-term goals and has not curtailed the resources allocated for the social sectors. While Rs 99,300 crore has been allotted for the education sector Rs 69,000 crore; Rs 12,300 crore and Rs 3,000 crore have been allocated for the Healthcare sector, Swacch Bharat program and Skills Development respectively.
Ms. Debjani Ghosh, President, NASSCOM said, The National Association of Software and Service Companies (NASSCOM) welcomed the technology thrust in the Union Budget 2020 and stated that `Budget 2020’ is well aligned to the Techade theme that NASSCOM has articulated for the country. The Finance Minister’s thrust on leveraging emerging technologies for education, healthcare, agriculture, governance will help India address the key challenges of access, affordability and inclusion. “Budget 2020 and the finance minister’s speech has well articulated India’s vision on not just being a leading provider of digital solutions, but one where technology is the bedrock of development and growth”.
NASSCOM in its budget submissions and other proposals has constantly emphasized the importance of deep tech and innovation. The announcements on the Quantum Computing Center, Data Center policy, IPR portal, CoE will create the digital infrastructure for industry and government. One of the key asks from NASSCOM for boosting the start-up ecosystem was the issue of ESOPs and allowing scaled up startups to benefit from the tax incentives. It’s heartening that budget 2020 has simplified the ESOP policy and extended the tax incentives for up to 100 crore startups over a 10 year period. Incentives for MSMEs like audit exemptions for upto 5 crore companies will enable ease of business for small companies.
Sunil Jose, Senior Vice President & Country Leader, Salesforce India said, We’re pleased to see Artificial Intelligence (AI) adoption emphasised in the Union budget 2020-21, by the government. At Salesforce we agree that there is a tremendous opportunity in India to reskill existing and develop new AI talent for jobs of the future. It’s also equally important that as we develop new advances in AI and skill new workers, that we make sure the ethical use of AI is a part of this development process.
Dr. Vikas Joshi, Founder and CEO of Harbinger Group said, Although the budget is high on aspiration, it may fall short in substance. In a welcome move, the budget is aligned to employment-generation in emerging sectors with a focus on skill development, internships for fresh engineers from urban local bodies, and online degree programs from top academic institutions. However, growing the supply of skilled resources is one side of the growth story. The other side is growing the demand for such resources. A 10% growth target is aspirational, yet lacking in concrete pro-growth measures, especially in high tech industries. Although slashing corporate taxes and introducing faceless tax assessments are welcome measures, the Budget has no benefit extended to the IT industry in particular.
Rahul Sharma, MD-India, LogMeIn said, Budget 2020 looks very promising. We are particularly enthused about the FM’s announcement of seamless delivery of digital services as part of the next wave of digital revolution. AI, ML, Analytics, IoT, Robotics are making giant inroads in India, as was observed in the budget. The policy being introduced to build data centre parks throughout the country will help enhance the digital infrastructure to a significant extent. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike.”
Prakash Mallya, VP, and MD – Sales and Marketing Group, Intel India said, The Union Budget highlights the role technology-enabled innovation can play in leapfrogging the nation. From integration in priority sectors like agriculture and healthcare to a continued focus on smart cities, the first budget of the new decade clearly outlines the significance of a digital-first India in realizing the country’s potential. I am especially encouraged by the efforts to use artificial intelligence (AI) and machine learning (ML) to improve disease detection and pre-emption as part of the PM Jan Arogya Yojana. Such applications of emerging technologies combined with the focus on increasing the penetration of fibre connectivity in the nation have the potential to fundamentally impact the lives of millions in the coming years.
Hemal Gathani, Co-founder, Zeux Innovation said, Two messages stand out from today’s Union Budget address for companies like us. One, the commitment being demonstrated by the Government to emerging technologies and initiatives being taken to improve the ecosystem – be it in terms of setting knowledge or technology clusters or announcing a National Mission on Quantum Technologies. Having relocated from US to start a company here, we are thrilled with the government’s resolve on this issue. Two, trying to do their bit in creating more stable start-ups – by resolving issues such as tax relaxation on ESOPs. Although much more is still to be done jumpstart the economy, but steps such as these will surely help stem the fall and lay new ground for growth.
Government is walking the talk to make India a leading startup hub in the world. Government has announced numerous benefits for all the key stakeholders in the startup space – Employees, Investors & Promoters etc. This will go a long way to make India the preferred destination for startups, he added.
Takayuki Inaba, Managing Director–NEC Technologies India said, The current budget proposals exhibit a determined approach of government to make India ready for new technologies. Rs.6000 crore allocation for the proliferation of technology to the lowest level of society by connecting 1 lakh gram panchayats through Fibre to Home connections for supporting basic social infrastructure is a welcome step. The vision of providing panchayat level public institutions with digital connectivity will help streamline the integrated development work and open big opportunities for several stakeholders in the country. Proposal to develop Data Center Parks throughout the country is another major step towards digitization and capitalizing data resource available with government agencies.
Sanjay Gupta India Country Manager, NXP Semiconductors said, Union Budget 2020 takes a pragmatic approach to spur sustainable growth by maintaining focus on core aspects of the economy. It’s a progressive budget that lays thrust on the sectors which will enable India’s economic growth. We are excited to know that the government aims to make India a manufacturing destination for mobile phones, electronic components and semiconductors and keenly look forward to a detailed policy for the sector as it can pave the path towards making India a major semiconductor hub in the coming times. We also welcome the budget allocation of Rs. 8000 crores for quantum computing, that can open up a lot of new opportunities and commercial applications in the future. The government’s focus on new-age technologies like Data analytics, IoT and AI and improvement of digital connectivity can help the country achieve its goal of becoming a $5 trillion economy by 2025. Extensive use of these technologies will enable stakeholders across tiers to make faster and more evidence-backed decisions leading to business growth.
Vikas Garg, Deputy CFO, Paytm said, We see this budget as a good step in direction to become a $5 trillion dollars economy. As a technology player embedded in India’s technology ecosystem, we welcome the government’s vision to build Data Centre Parks in the country. The government’s focus on enhanced digital connectivity, and focus on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to India’s economy.
CA Inderpal Singh Pasricha, Senior Partner, I. P. Pasricha & Co. said, The Union Budget 2020-21 introduced by Finance Minister Niramala Sitharaman is very much appreciable on the note that a new optional income tax system is proposed for individual tax payers. “Now individual tax payers who are not willing to claim deductions under various provisions of the Income Tax Act are now provided with an option to pay tax at reduced tax rates which enables a tax payer to avail a beneficial option out of two “VIVAD SE VISHWAS SCHEME” will help to resolve long pending tax disputes. Waiver of interest and penalties would attract a lot of tax payers to opt for the scheme.
Jaijash Tatia, Co-founder, StuCred said, The impetus of government on the development of technology and making country Digital will go a long way in encouraging startups like us working in the domain. Also the government has allocated a fund of Rs 96000 crore on education will mean more students coming in and with them the responsibility of companies that are working in that domain such as the ones working on financing the students during the time of their education. The Budget is forward looking as its focus is the overall development of economy, which calls for a concerted effort from every sector to make India a USD 5 trillion economy.
Sparsh Khandelwal, founder, Stylework, a start-up operating in co-working aggregation domain, said, India is the third biggest startup ecosystem in the world and the focus of the government has been was to provide a push to the innovative startups through policy interventions. Start-ups showed were positive about the announcements made in the Budget. “From the Budget it is clear that the budding entrepreneurs will have ease of doing business as the FM announced that tax harassment will be stopped. Corporate tax reduction will also help the start-ups to prosper. Today’s Budget also has some announcements such as a five-year tax holiday on Esops, a 10-year tax exemption for startups with under Rs 100 crore turnover, a total of Rs 27,300 crore allocated to industry and commerce will also give a boost to the start-up story in India, and also talks of a seed fund to push new businesses.”
Sqn Ldr Prerana Chaturvedi, CEO and ED, Evolet, said, Another upcoming segment in Indian economy is the Electric Vehicle and it was waiting for positive announcements that could have helped in the growth of this sunrise sector. “We have been waiting for good but we haven’t heard anything significant. We have been patient and we will continue to be patient. Now we all agree that it is green and sunrise industry and if we have to pay respect to the sunrise industry then we have to stand with the industry. If we expect a start up to create a disruption then we have to support that sunrise industry.”
“Though there are no direct announcements for the electric vehicle segment, we can see ray of hope in announcements such as allocation of Rs 4,400 crore for cities to ensure clean air and relief in income tax. People will now have more disposable income at hand and this might trigger the demand for electric vehicles. However, the government should have abolished the custom duty of 5 percent on lithium-ion battery cells that could have made the EVs more affordable. The cost of batteries are high and we were expecting the Government will provide incentives for the sourcing of raw materials for EV battery manufacturing in India that would have helped in creating an EV-centric ecosystem,” she adds.
