The Union Budget 2018 had several exciting provisions for Indian startup ecosystem and new age technologies. It was definitely exciting to see the government’s focus on artificial intelligence and machine learning. Increasingly as the adoption for AI and ML grows not just in tech companies but also in traditional companies, policies and research in this sector will assist in charting a way forward in areas of concern such as job creation, economic impact and cybersecurity.
Indian startups and companies currently lag far behind their global counterparts in AI and NITI Aayog’s focus on research around this will hopefully address some of these concerns by encouraging indigenous development and talent from engineering institutions.
Despite a rise in mobile phone adoption, connectivity still remains patchy in rural areas. Setting up rural wi-fi hotspots is extremely capital intensive. As per Akamai, our average Internet connection speeds ranks 89th out of 145 countries in the world. Increased connectivity in rural areas will bring many people online, which will positively impact their lives.
This opens up massive opportunities for areas like banking, travel, payments, ecommerce and retail.
Union Budget 2018: Impact On Travel Sector
The proposal to develop 10 prominent tourist destinations as iconic retreats, is much needed to revive tourist interest, generate revenue and also create more job opportunities locally. This is also exciting for travel sector companies like us as it expands our opportunities to serve more tourists and build up India’s tourism potential.
We believe, an increased focus on the UDAN scheme will encourage domestic passengers to take affordable flights. An increase in connectivity to Tier 2 and 3 cities will overall boost tourism. The Airports Authority of India currently has 124 airports. An increase in airport capacity will further favour domestic tourism.
Safety has been a major concern for railways over the last one year. We are happy to see the government sharpen its focus on the same. Digital connectivity at railway stations will allow for better access to passenger amenities and more opportunities for businesses. This creates immense opportunities for players like us and also for telcos, content providers and others.
In order to match with world class infrastructure, station renovation is a must, this will help handle the bustling railway traffic.
Union Budget 2018: Impact On Startup Ecosystem
Setting up a new regulatory regime for VC funds and angel investors is a welcome move. However similar regulations in the past have yet to benefit the majority of the startups.
Hence it’s extremely important that the government provides ample support for the early stage VC funds in order to attract more investments in the sector, engage more LPs globally and boost family offices who have been actively dipping their toes in the Indian startup ecosystem.
The focus on improving the policies for VC and angel investments is also very promising. However, we hope they will address the concerns around Angel Tax. The corporate tax relaxation limit should have been higher than $38.9 Mn (INR 250 Cr) as it will then bring more startup and medium scale industries in the ambit.
Overall the Union Budget 2018 was startup friendly and progressive in nature, with scope to do a lot. The impact on the travel sector was mostly positive, with a favourable impact on the Indian startup ecosystem.