Union Budget 2020
Every year, we bring the rundown of the Union Budget from the lens of the startup ecosystem through a mix of pre and post budget coverage showcasing the expectations and impact on the ecosystem.
India has shifted its focus towards becoming a ‘new economy’ if Nirmala Sitharaman’s Budget 2020 is to be believed.
The country, over the years, has witnessed a rapid growth in terms of data usage across various sectors, including ecommerce, foodtech, governance and finance among others. Startups that have leveraged emerging technologies and data analytics tools in their business have witnessed a massive growth in the recent past. To consolidate these developments, Sitharaman proposed that data centre parks be set up across the country to unlock the ‘data is the new oil’ potential.
Sitharaman also said that the new economy will be based on innovations that disrupt established business models which use artificial intelligence (AI), internet of things (IoT), 3D printing, drones, DNA data storage, quantum computing and others.
“The organisations that are working in the areas of advanced technologies will be re-writing the world economic order,” said FM Sitharaman.
She further said that the country has already embraced new paradigms such as the sharing economy with aggregator platforms among others which are displacing conventional businesses. “Government has also harnessed new technologies to enable direct benefit transfer and financial inclusion on a scale never imagined before,” she added.
Sandipan Mitra, CEO and cofounder of HungerBox, said that India has embraced shared economy and welcomed the digital revolution with open arms. This budget has certainly addressed some challenges that were faced by budding startups and has made it easier for them to receive funding from investors, he added. Based in Bengaluru, HungerBox is an institutional B2B2C foodtech startup.
Data Is The New Oil
The increasing number of smartphone penetration coupled with low-cost data availability and usage of social media platforms such as TikTok, Facebook, WhatsApp, Twitter and others, alongside the popularity of over-the-top video streaming platforms such as Netflix, Amazon Prime Video, Hotstar and others have led to rapid growth in data usage and storage in the country. The digitisation of MSMEs and small businesses has also pushed the need for more data centres in India, especially with data localisation being a key focus in this advancement. Inevitably, this is attracting a lot of global and Indian cloud service providers into the market.
FM Sitharaman said “It is now a cliché — ‘data is the new oil,’ and it is true that analytics, fintech and IoT are changing the way we deal with our lives. To take advantages of this, I propose to bring out soon a policy to enable the private sector to build data centre parks throughout the country.” Sitharaman said this would enable Indian businesses to skilfully incorporate data in every step of the value chain.
Further, in an attempt to digitise rural India, FM Sitharaman said that all ‘public institutions’ at gram panchayat levels such as anganwadis, health and wellness centres, government schools, post offices, and police stations will be provided with digital connectivity. “So, Fibre to Home (FTTH) connections through BharatNet will link 1 Lakh gram panchayats this year,” she added.
Taking this project ahead, the Indian government has allocated INR 6K Cr budget to BharatNet programme in 2020-21.
Commenting on this, Harsh Jain, cofounder and COO of digital investment platform Groww, said “Making policy for data centre parks for digital resources like fintech, AI, aggregator platforms along with the connection of 1 Lakh villages via optical fibre internet is great news for digital India. This will definitely increase digital penetration into India that was unthinkable before.”
Speaking to Inc42, Ankit Dudhwewala, founder of SoftwareSuggest also said that data centres are at the heart of a modern digital economy and that the government’s decision to promote the establishment of data centres in India is a win-win decision for businesses and consumers.
“A considerably more significant number of data centres in India will make the economy more competitive, globally. Indian IT players will definitely benefit from the building of additional data centres,” he added.
Based in Ahmedabad, SoftwareSuggest is a platform that helps business and enterprises and professionals to discover software and service partners.
Further, Vivek G. Mendonsa, Director at Lawrence & Mayo also said, “focus on building a strong IT infrastructure through the creation of ‘Data Parks’ for an effective and integrated digital network, is another visionary step to making India a robust digital economy.”
Indian Data Service Providers Are Smiling
According to a report ‘India’s Data Centre Industry – Poised at the tipping point,’ India’s data centre industry is expected to register threefold growth in revenue to $3.3 Bn by 2024. The growth is expected to be fuelled by the development of additional real estate space of 7.8 Mn sq for setting up data centre facilities, along with data service providers offering data infrastructure solutions.
With the Indian government’s transitioning towards the digital economy and data localisation, increased focus on setting up data centre parks locally was expected from this year’s Union Budget.
Commenting on the policy announcement for data centre parks, Sharad Sanghi, MD & CEO of NTT-Netmagic, said the company welcomes the government’s proposal to roll out a policy enabling the private sector to build data centre parks. He further said that government initiatives like smart cities and Digital India, policies around data localisation and the digitisation of various industries such as financial services, ecommerce, media, and the manufacturing sector have fuelled the demand for the data centre industry in India.
Another player in the data services landscape, DigitalOcean which focuses on the under-served small and medium business (SMB) cloud business market segment, said that the Union Budget announcement to create data centre parks will further boost “business ignition” for startups and SMBs to the next level.
Adding to this, Prabhakar Jayakumar, country director for India at DigitalOcean, told Inc42 that cloud computing will further enable entrepreneurs to get their ideas to market as quickly as possible and build tomorrow’s great businesses. And data centre parks will play a crucial role in making this work seamlessly and at scale.