“In this digital age, we have an opportunity to transform the lives of people in ways that were hard to imagine a couple of decades ago. I see technology as a means to empower and as a tool that bridges the distance between hopes and opportunity. We must ensure that technology is accessible, affordable and adds value.” – Indian Prime Minister Narendra Modi.
Keeping to this theme, technology formed one of the chief focusses in the Union Budget 2018, with Finance Minister Arun Jaitley giving more precedence to 5th generation technologies like artificial intelligence (AI), machine learning (ML), Internet of Things (IoT), 3D printing and blockchain.
To pave the way for greater advancements in digital technologies, the government has doubled its allocation to the ‘Digital India’ programme to $480 Mn (INR 3,073 Cr) in 2018-19.
During the Budget 2018 session, Jaitley announced that the government will be investing extensively in research, training and skill development in robotics, AI, digital manufacturing, Big Data intelligence and Quantum communications, among others.
He said, “Digital technologies have played a key role in providing benefits to the poor. Demonetisation has encouraged digital infrastructure and recapitalised the banks. The global economy is transforming into a digital economy thanks to the development of cutting age technologies like ML, IoT, AI and 3D printing. Initiatives like Digital India, Make In India, Startup India will help to establish itself as a knowledge and digital society.”
“Combining cyber and physical systems with greater potential will transform not only innovation ecosystem but also our economies and the way of life. The Department of Science and Technology will launch missions in cyberspace, in support of the establishment of centres of excellence,” the minister added.
Welcoming the allocation of fresh funds towards facilitating digital technologies, Subho Ray, President of the Internet and Mobile Association of India (IAMAI) said, “Digital technologies can bring in efficiency and economic scaling up in the critical social sectors. Budget 2018 gives recognition to the emerging sectors like edtech, agritech and healthtech in India and is an encouragement for Digital India. The 372 basic business reform actions identified for improving ease of doing business in India is a positive step.”
Along similar lines, non-profit technology think tank ISPIRT said, “It is heartening to see government adopt the same digital-first approach when it comes to health and education. While this is a great start, much work remains. Laying the policy foundation alongside an India Stack inspired technology spine will ensure the rise of the Bharat focused tech-entrepreneur. We need India’s entrepreneurs to lift outcomes for patients and students not adequately served by our existing system.”
Some of the other key announcements made in Budget 2018 include greater digital intensity in the education sector, the establishment of a special group under the Finance Ministry for exploring fintech operations for MSMEs and the allocation of $1.5 Bn (INR 10,000 Cr) for the installation 500K public WiFi hotspots. All these initiatives, according to Ray, will help promote Internet penetration in the country, while also bringing the population under the umbrella of digital inclusion.
A Recap Of The Key Technology Related Announcements Made In Budget 2018
Presented by the Finance Minister Arun Jaitley earlier today, the Union Budget of India for the fiscal year 2018-19 is the last full-fledged budget announced under the current term of the PM Modi-led government. Here are some of the key technology-related announcements made by Jaitley in this year’s budget:
Indian Govt. Bullish On 5th Gen Technologies
Emerging technologies such as AI, ML, IoT and 3D printing formed one of the chief focusses in the Union Budget 2018. As part of the session, Finance Minister Arun Jaitley announced that the government will invest extensively in research, training and skilling in robotics, digital manufacturing, Big Data intelligence and Quantum communications.
Speaking on the budget’s emphasis on technology, Arindam Guha, Partner at Deloitte India told Inc42, “It is encouraging to note the focus on new generation technologies like robotics, artificial intelligence, analytics, etc. as far as skill building initiatives go. It remains to be seen how partners from the private sector eco-system with knowledge and expertise in these areas get involved in this initiative.
Nikhil Barshikar, MD of Imarticus Learning opined, “The government acknowledging the requirement to train people on new technologies like Blockchain, Robotics and Artificial intelligence was very encouraging. This will encourage professionals to develop specific skillsets leading to a better up-skilled workforce. With this positive step for the sector, we expect a better and future ready India”
NITI Aayog To Establish National Programme For AI Research
As an added boost to the country’s fledgeling AI sector, Jaitley announced that the government-run think tank NITI Aayog will be launching a national programme, with the aim of facilitating research in artificial intelligence-related areas. Furthermore, the programme will be geared towards developing new applications of the AI technology.
Hailing the move as a major positive step in creating a robust digital economy, Atul Rai, co-founder and CEO of Staqu, a startup that specialises in AI-driven bidirectional image understanding, averred, “This year’s budget not only takes significant steps towards the Digital India vision but also towards inculcating the latest technologies like Artificial Intelligence for the national development.”
Rai added, “With NITI Aayog to establish a national programme for artificial intelligence, we look forward to supporting the nation with R&D and more programmes like ABHED which is already assisting the Police forces with AI capabilities.”
According to Rai, with the advent of new technologies and the Indian government being equally eager to adopt them, India is well on its way to emerge as a leading digital nation on the world map.
Allocation Of $480 Mn Funds Towards Digital India
In one of the biggest moves ever made to support the country’s AI, ML, Robotics and IoT sectors, the Indian government has doubled its allocation to the ‘Digital India’ mission to around $480 Mn (INR 3,073 Cr).
As stated by Aakrit Vaish, founder and CEO of Haptik, “Allocation of significant fund and announcing efforts to enhance research in disruptive technologies like Artificial Intelligence (AI), Internet of Things (IoT) and Robotics implies that the importance of adoption of such technologies has finally been taken into consideration by the government.”
He went on to say, “With NITI Aayog set to establish a national programme for artificial intelligence, this will not only significantly aid job creation but will also assist the government to move towards its Digital India vision.”
Dept. Of Science And Technology To Help Establish Cyberspace Centres Of Excellence
In a bid to foster an environment of research and technical skill development, the Department of Science and Technology will be launching a mission in cyberspace, in support of the establishment of centres of excellence.
Commenting on this announcement, Vivek Bhargava, CEO of DAN Performance Group told Inc42, “FM Jaitley’s budget this year focuses on investments to be placed in artificial intelligence, machine learning and ‘The Internet of Things’ with NITI Aayog establishing a national programme to direct efforts in artificial intelligence. The government has committed itself to the development of technology along with concentrating on AI and its applications which is a revolutionary move for the digital industry.”
HAL Robotics MD Prabhakar Chaudhary believes that, by emphasising Digital India powered by AI and allocating substantial funds towards the same, the government has seriously understood the need and the capability of technology. The developments indicate that the government is recognising future technologies for building the nation’s future. Not only will these initiatives help in job creation, but will also drive the nation further in the competitive global space.
Blockchain Essential To Efficient Governance
Although the government is sceptic about the idea of cryptocurrency and has announced its intentions to curtail the use of cryptocurrencies for financing illegitimate activities, it has not failed to notice the untapped potential of blockchain and its application in administration.
According to Jaitley, the integration of blockchain in governance could result in quicker operational response as well as decision making.
Talking about the potential of blockchain, Jesse Chenard, co-founder and CEO of MonetaGo averred, “The RBI has shown significant interest in Blockchain with a number of proof of concepts (PoCs), including the white paper we did with the IDRBT and major banks. The RBI will continue to pursue Blockchain solutions to improve interoperability and reduce friction in digitisation.”
According to Chenard, while cryptocurrencies have been labelled as illegal tender in India, the government has welcomed Blockchain, the underlying technology for its projects in payment services, agriculture, financial exchanges, infrastructure, education among other sectors.
He said, “FM Arun Jaitley mentioned that the government is currently reviewing the effect of FinTech industry in the country so 2018 will definitely see a rise in the scope of work in the said space wherein different industries may go for PoCs to test the efficiency of the blockchain technology in respective use cases.”
Sharing his views on the matter, Atul Khekade, early-stage Investor and Head of Ecosystem Development at XinFin FinTech stated, “Blockchain technology has been welcomed by the government and can be deployed in use cases across education, aviation, healthcare, infrastructure like roads and rails, among other segments.”
Blockchain, according to Khekade, has the capacity to reduce government burden on the treasury by using it to attain funding and financing for micro to macro-projects in education, healthcare or infrastructure to begin with.
What Does The Budget Mean For Indian Startups?
While Budget 2018 is majorly focussed on strengthening the agriculture and education industries, there are a few points geared towards fostering a solid foundation for the emergence of startups in India.
For instance, the reduction of corporate tax is a clear step towards helping startups grow and scale their business. Additionally, the proposed plan to set up 500K WiFi hotspots across the country is also a progressive decision, provided that it is implemented swiftly and efficiently.
One of the key announcements made during the Budget 2018 that will directly benefit startups is the allocation of $480 Mn funds to the ‘Digital India’ mission. With the government pushing for digital and financial inclusion, a plethora of startups have cropped up in recent times to make digital technologies more available to the masses.
The latest $480 Mn commitment points to the government’s intentions to promote fifth generation technologies like AI, ML, IoT, Blockchain and Big Data. Consequently, India is expected to see more and more application of these cutting-edge technologies, which would in turn help bring the economy at par with developed countries.
Adaptation of such technologies will not only boost the ease of doing business, but will also help in accelerating the country’s economic growth. The government’s efforts in this regard seem to have fructified, given that the Indian IoT market is expected to touch $15 Bn within the next two years.
Out of the existing 971 IoT startups in India, 70% of the startups emerged after 2010. As per a report by Zinnov, over 120 IoT Indian startups have received over $169 Mn in funding since 2006 (till May 2017). Large investors that have created IoT-focussed investment funds are Tiger Global Management, Blume Ventures and Qualcomm Ventures.
At present, in India, IoT technologies are used to digitise healthcare, transport, agritech, services and logistics. While 47% of these companies currently cater to consumers and hardware solutions such as wearables, connected vehicles and connected appliances, 40% focus on enterprises.
Artificial Intelligence and machine learning, on the other hand, have far-reaching applications be it in ecommerce, fintech, banking, surveillance, customer service and support, big data analytics, intelligent shopping assistants or conversational bots.
Blockchain, although still in the nascent phase in India, has the potential to revolutionise the country’s financial services and banking sectors. For the past few years, blockchain has become a new horizontal for verticals like supply chain, smart contracts, file storage, IPs, Energy management, AML, stock trading, governance, land registrations and more to count.
As stated by PM Narendra Modi during last year’s Independence Day speech, startups contribute greatly to the country’s economic growth through job creation. Through the NITI Aayog’s national programme on AI research and the other tech-focussed initiatives adopted by the government as a part of this year’s budget, startups in the country will undoubtedly receive a major boost, which will in turn help create jobs for the country’s youth.
While Budget 2018 has instituted a number of positive changes geared towards transforming India into a global economic power, there’s a lot that has been overlooking, especially when it comes to the Indian startup ecosystem.
On the apparent lack of startup-centric announcements in Budget 2018, iSPIRT said, “On the startup and investor fronts, this budget is a missed opportunity to address the important near-term issues. We had hoped to see the resolution for Angel Tax and other such stay-in-India checklist issues. Slapping a long-term capital gains tax on the previously untaxed sale of listed equities will adversely affect the List-in-India initiative. Additionally, the compliance overhang of listing will no longer be tempered by the promise of tax-free gains. The promised tax regime must incentivise and protect foundational (angel and domestic investors) as opposed to fleeting capital.”
According to Mayank Bhangadia, co-founder and CEO of Roposo, “The budget would have been a lot better if it focussed more on startups which comprise the bottom of the industry pyramid. I believe incorporating that into the plan would have helped in the progression of the industry as a whole. Apart from that, I am quite glad that the government has placed growth as its main agenda for the budget rather than the 2019 elections.”