Budget 2023 Expectations: Startups seek efforts to foster innovation and digitisation
The year gone by would be remembered as a marquee year for the technology space, especially smart wearables, from an innovation and adoption standpoint in India. With a deep impact on society, the year marked a turning point in the development of 5G, Artificial Intelligence, gesture control technology, voice assistance, and much more. It was a year full of surprises and kept tech enthusiasts at the edge of their seats.
While there was an unanticipated economic slowdown, the wheels continued to turn in the innovation space as consumers continued to seek more. As India continues to digitise and modernise exponentially, the technology sector has become a vital driver of economic growth and social progress, whether it is through the wider adoption of new-age devices or the integration of new-age tech across different industries.
With just a matter of days, until Finance Minister Nirmala Sitharaman takes to the floor of the Parliament to unveil the Union Budget for 2023-2024, speculation is running high about the government’s plans to further bolster India’s economy. From expanding digital infrastructure to fostering innovation and investing in emerging technologies, the potential implications of the Budget for the tech industry are far-reaching. As we await the official announcement, I would like to shed light on the key areas where we expect the budget to have the biggest impact on the technology sector in India.
Boost startup ecosystem
India is emerging as one of the strongest economies globally, primarily owing to the entrepreneurial spirit that prevails in the country along with the continued efforts of the government to insulate the impact of global headwinds. Being the third-largest startup ecosystem in the world after the US and China, India can leapfrog as the startup capital of the world with the introduction of the next generation of reforms that focuses on increasing access to funds for entrepreneurs.
While global brands have constantly affirmed their positions as the propellers of the industry, the spike in startups in India has further fueled the technological revolution in recent years. They have also grown in scale and branched out globally owing to the large pool of highly skilled young professionals and innovative minds that have the potential to make it big.
India currently has over 83,000 startups and ranks as the third-largest startup ecosystem globally. However, the ecosystem can further benefit with a push from the government in the upcoming budget. Offering tax incentives such as lower corporate tax rates and exemptions on capital gains tax is vital for the startup ecosystem.
The space can especially benefit from access to new markets through increased trade and investment opportunities and supporting the development of digital platforms for e-commerce and other services. Attention to diversifying the vast pool of Indian talent will also help create new cutting-edge differentiation in the startup sector, enabling India to take center stage in the global ecosystem.
Accelerating India’s ‘Atmanirbhar’ vision
The PLI scheme has been a game changer in accelerating India’s vision of being ‘Atmanirbhar’ as part of the flagship Make in India initiative. Creating an ecosystem for the manufacturing of components as part of the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS), and Modified Electronics Manufacturing Clusters Scheme, can extensively support in accelerating India’s efforts to make India self-dependent.
India is now the largest market for smartwatches, surpassing US and China, and making adequate provisions to build a robust infrastructure for component manufacturing in the country would further help homegrown brands to ramp up efforts toward making India the global manufacturing hub. This will not just reduce dependency on imports but will also play an integral role in bringing down the cost of the product and making it accessible to a larger set of customers.
Budget 2023 must continue to focus on capital expenditure as a growth driver and give an impetus to local manufacturing. The sustained efforts to ensure domestic production of high-end components will further boost the development of a complete ecosystem for electronic manufacturing in the country. These measures will create a more conducive environment for manufacturing in India while promoting the Make in India initiative and reducing dependence on imported goods.
In conclusion, the technology sector and the overall economy are expected to receive a noteworthy boost in the upcoming Budget, with an increased focus on building startup ecosystems, digital infrastructure, innovation, skilling, and manufacturing. With the government’s support coupled with initiatives like Startup India and Make in India, the country is set to make headway in the technology industry and reach a global scale.
The writer is Co-Founder, Noise (@gonoise)– connected lifestyle tech brand. Views expressed are personal
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