Interim Budget 2024: FM Announces A New Scheme To Strengthen Deeptech For Defence Purposes

In a bid to give a further boost to innovation in the country’s deeptech ecosystem, Finance Minister Nirmala Sitharaman during her budget speech on Thursday said that a new scheme will be launched to strengthen the sector for defence purposes. 

Sitharaman said that the new scheme would expedite the Modi government’s ‘Atmanirbhar Bharat’ vision, emphasising that the country needs programmes that combine the powers of youth and technology.

The development comes at a time when the Centre is focusing on developing segments such as artificial intelligence (AI), semiconductor manufacturing, spacetech, and other allied sectors.

In her speech, the FM also announced a corpus of INR 1 Lakh Cr to provide 50-year interest-free loans for research and development in the sunrise sectors.

“The corpus will provide long-term financing or refinancing with long tenors, and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains,” the minister said.

In last year’s Union Budget, Sitharaman had announced setting up three Centres of Excellence (CoEs) for AI in top educational institutions. The Centre then also proposed a National Data Governance Policy to enable widespread access to anonymised datasets.

Speaking on the Indian government’s announcements during the interim Budget 2024 to further boost deeptech, Ankur Bansal, cofounder and director of BlackSoil, said, “The FM’s interim budget announcement on deeptech aligns with our expectations… The proposed scheme focused on deeptech defence technologies will not only ignite innovation and bolster national security but also provide a fertile ground for startups to thrive.” 

Further, this will encourage entrepreneurship, helped by the announcement of establishing the INR 1 Lakh Cr corpus for research and innovation in sunrise areas, he said.

Reflecting a similar sentiment, Sukhmani Bedi, partner at Orios VP, said that the “massive” INR 1 Lakh Cr corpus with long-tenor, low-cost capital not only provides a runway for research advancements but also incentivises the private sector to boost innovation capacities. 

“Combined with the new scheme to expedite defence-focussed deeptech and sops for startups to encourage IP generation, this landscape oils India’s rise as a scientific powerhouse. For venture capital funds like Orios VP, these directives stimulate a thriving ecosystem for audacious science entrepreneurs to build game-changing products,” said Bedi.

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