Union Budget – Dutch Uncles

Taskforce for the Animation and Gaming Sector : How Will it Benefit?

Shalmoli Sarkar — Fri, 04 Feb 2022 14:58:43 +0000

After all these years being largely neglected, the union budget 2022 has surprised the animation, visual effects, gaming, and comic (AVGC) sector with its announcement of setting up a promotion task force to recommend ways to employ youth and build the domestic capacity of the AVGC for serving Indian markets and the global demand. This move is highly lauded by the gaming and the animation fraternity. It might seem that the move came all of a sudden, but this space was largely under the government’s growth radar that led The Ministry of Information and Broadcasting (MIB) in 2020 to announce that it will establish AVGC Centre of Excellence (CoE) to make gamification and animation industry a major export for the country and a wealth generator. Currently, as per the joint report of the confederation of Indian Industry (CII) and the BCG, India has less than 10 percent of the global market share in VFX and animation.

Animation and gaming – a wealth generator

China is the undisputed leader of the gaming world, but we cannot deny the booming Indian market as well. Over the past few years, global game publishers have gone beyond the Chinese market to outsource animation technology from the Indian game development firms to reduce costs and meet the game launch deadlines. The global game projects have been driving the demand for skilled professionals for game development in India, not forgetting the contribution of lockdowns and mobility restrictions.
Besides, low labour cost what makes India an excellent market for outsourcing animation technology is its vast base of English-speaking workforce. Understanding the English language is a prerequisite in the industry to lip-sync the animated media to the audio dialogue. It is a skill that the Indian workforce possesses in abundance. Karnataka, especially Bangalore the startup capital of India has witnessed the entry of many global gaming majors who have tapped into India’s talent pool for offshore production. The Karnataka AVGC Policy 2017-2022 aims to develop Karnataka into a leading global AVGC hub in terms of export revenues, projects, and employment by strengthening the ecosystem.

To talk about the demand in the domestic market, India is showing a high level of appetite in animation and VFX content to power immersive experiences such as augmented reality and virtual reality especially in edtech. Films, web series, and gamers are enthusiastic about creating immersive and engaging visual effects, and realistic animation. The opening theme of Hansal Mehta’s ‘The Scam 1992’ makes it quite evident about the creativity the animation and VFX industry has added. Besides, the availability of low-cost internet access, penetration of mobile devices along the growing popularity of streaming video and playing games is giving impetus to the development of animation and VFX content.

India is a young country with two-thirds of it under the age of 35 which makes the country adequate with millennial consumption and therefore is poised to become the world’s leading market for gaming. A study from BCG says that there are around 300 million people who play games on mobile. According to the BCG-Sequoia India report, 2021the Indian gaming industry is generating $1.5 billion in revenue and is expected to become triple by $5 billion by 2025.

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According to the BCG-Sequoia India report, 2021the Indian gaming industry is generating $1.5 billion in revenue and is expected to become triple by $5 billion by 2025.

Gaming will become mainstream in 2022

Online gaming is soon to become a mainstream form of entertainment, with more gamers birthing from tier-II and III cities. According to a study by Mobile Premier League, small towns have more than 100% to up to 200% growth in online gamers, which talks about its booming market in India. With the task force announcement by the union budget, the gaming ecosystem will open new avenues of employment for gamers, IT, and computer engineers. In addition to this, the online gaming ecosystem will evolve into various business models, Non-fungible token (NFT) virtual avatars, in-game items/rewards, etc, and expect more online gamers to shift from free-to-play to paying-to-play, in-game purchases, and skill gaming. This will drive industry players to develop new games for users based on traditional games and Indian themes and establish a strong presence with a foothold in the domestic and global market.

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Union Budget 2022: How Much has it Favoured the Startups

Shalmoli Sarkar — Thu, 03 Feb 2022 09:37:18 +0000

1st February is a significant day where the eyes of every business owner are glued to the screens, to understand how the union budget favours them. On 1st February 2022, Finance Minister Nirmala Sitharaman presented the nation’s second paperless union budget. As India is on the cusp of technological advancement, this year’s union budget proves this further. Let us understand the startup-friendly new initiatives and policies brought by the union budget 2022 for India’s startup ecosystem.

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According to a KPMG report, the gaming sector in India will become $ 3.9 billion by 2025.

New initiatives and policies introduced by the union budget 2022

Drone Shakti: The union budget has welcomed the usage of drones particularly in agriculture where the drones will play a role in crop assessment, digitisation of land records, spraying of insecticides, and nutrients. The startups will be promoted to facilitate drone-as-a-service through varied applications. In ITIs across India, the required courses for drone skilling will be undertaken. The government recognises geospatial systems and drones as the sunshine sector as they have immense potential to assist sustainable development at scale and modernise the industry and will simultaneously create employment opportunities for youth.

A boost to gaming and animation: A pause on outdoor activities in the pandemic has made individuals especially the GenZ inclination towards gaming. According to a KPMG report, the gaming sector in India will become $ 3.9 billion by 2025. The union budget this year has realised the potential in animation, visual effects, gaming, and comic sector to an open task force to build domestic capacity for serving both national and global markets.

Prioritising mental health: Recognising mental health a priority, the Finance Minister has announced a National Tele Mental Health programme to give better access to quality mental health counselling and care services. This initiative will include a network of 23 tele-mental health centres of excellence, with NIMHANS being the nodal centre and the International Institute of Information Technology-Bangalore (IIITB) providing technical support. The platform will provide counselling and care using standard, evidence-based, culturally appropriate tools and will enhance access to quality, standardised and free 24 X 7 mental health services to people. It will help to connect various mental health care services, the health, and wellness centres under Ayushman Bharat as well as with the e-Sanjeevani system.

The battery swapping policy for EV: Finance Minister has announced to roll out a new EV policy on battery swapping with interoperability standards. With this new battery swapping policy owners of electric vehicles will be able to exchange their drained batteries with charged ones at designated stations easing the use of such vehicles and reducing the time to charge. Due to the space constraints in urban areas for setting up charging stations, a battery swapping policy is introduced that will encourage several businesses and startups in the private sector to come up with innovative business models for ‘ battery or energy as a service. This policy will help in managing the space for the expansion of EV charging infrastructure.

This year the union budget has focused on sunrise sectors and has introduced supportive policies for AI, Geospatial Systems and Drones, Genomics and Pharmaceuticals, etc. which will aid in sustainable development at a larger scale. Also, a tax holiday for a year will be helpful for upcoming startups and will provide a much-needed boost.

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What Does a Young Indian Startup Want from the Union Budget 2022

Shalmoli Sarkar — Wed, 02 Feb 2022 08:50:03 +0000

Home to more than 61400 startups and 14,000 startups recognised alone in 2021 by the Department for Promotion of Industry and Internal Trade (DPIIT), India stands right next to US and China to become the world’s third-largest startup hub. As technology and internet access becomes available to the masses, more businesses and startups are birthing intending to disrupt conventional practices and make our lives simpler. The past two years of the pandemic have laid a rough patch for the homegrown businesses and startups, and to make these businesses afloat the government had announced a slew of measures to support them. The parliamentary standing committee’s announcement of the stimulus package to revive the startup industry fell inadequate as the measures adopted were more of loan offering that proved to be beneficial for the long term and did not contribute to improving the cash flow for immediate relief. The second covid wave has left the startup industry bleeding, therefore, the industry from the current budget is expecting startup-friendly policies, tax relaxations to enable spending on innovation and ease of doing business. Here is a list of expectations that the young Indian startups want from the union budget 2022.

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14,000 startups were recognised in 2021 by the Department for Promotion of Industry and Internal Trade (DPIIT).

Expectation of young entrepreneurs from the union budget 2022

Here are some of them

Alternative MDR or Reintroduce MDR: To democratise digital payment for the masses, the government has abolished MDR which is a fee for fintech and banks for using their platforms for the transaction. But, this is seeming a hard pill to swallow for entrepreneurs, since the abolishment is said to hurt the revenues of homegrown payment service providers. It either expects the union budget to reintroduce MDR or bring an alternative to it.
Easy and fast processes: Startup founders are expecting hassle-free loan disbursements, automation of tax and compliance, paperless approvals, and incentives to adopt digital banking practices.
Alleviate taxes: For startups and businesses in the manufacturing space, many businesses face weekly power shutdowns. With the price of diesel shooting cost of energy consumption is becoming expensive thereby, increasing the cost of manufacturing. The entrepreneurs are expecting the government to relook at the state level and central taxes.
Simplifying GST compliance: Startups want GST compliance to be hassle-free and more simplified which will enable more online sellers and small businesses to leverage the potential of e-commerce and contribute to India’s digital economy.
EV startups want tax reduction: As the government is increasingly emphasising electric vehicles and building green energy solutions. The EV startup founders are optimistic that the government will announce new initiatives to encourage local EV manufacturing, facilitate easy finance, and develop an innovative EV ecosystem. For consumers to smoothly adapt to EV, the startups want the GST of 5 percent applied on EV to be reduced to 2 percent.

The above are the expectations that India’s startup ecosystem is expecting from the union budget 2022. Simplifying the compliances and relaxation of taxes and reducing the tax slab etc, will create a conducive environment for doing business for startups.

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Eligibility for Start-ups and Partner Incubators for the Rs. 499 Cr Budgetary Support

Anju Nambiar — Sat, 19 Jun 2021 08:35:04 +0000

In yet another move to encourage defence based innovations within the start-up and small business community in India, a budgetary support package worth INR 499 Cr has been approved.

As per this move, the Government will procure a marginally higher amount of defence-related goods and services from micro and small enterprises in the current financial year. This move comes under the Make in India purview to foster domestic manufacturing.

The Innovations for Defence Excellence (iDEX) scheme

iDEX is a scheme by the Defence Innovation Organisation (DIO) which will extend financial support for 300 SMEs, start-ups, individual innovators and 20 partner incubators under DIO. Aerospace start-ups who want to provide defence related products and services are eligible to avail the funding. Grants will be provided for R&D development. The funds will be released to the DIO through the Department of Defence Production (DDP).

Eligibility Criteria for start-ups and partner incubators

Products and services with good potential for future adoption by Indian Defence and Aerospace are eligible for support.

Partner Incubators that come under the Department of Science and Technology are eligible for funds.

Technologies and products with relevant utility and impact on Defence and Aerospace in India stand a chance at getting shortlisted.

How start-ups will benefit

The Government is keen on supporting self-reliance and indigenisation in the defence and aerospace sector. This is a big push for small businesses in this sector. Start-ups and SMEs will be able to rapidly scale up and shorten their timelines. They can also cater to the needs of Indian Defence and Aerospace.

Start-ups with innovative solutions will benefit from increased engagement and encouragement from the Government. It is also a golden opportunity for start-ups to actively partake in the Indian defence needs and to work alongside the Government.

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Products and services with good potential for future adoption by Indian Defence and Aerospace are eligible for support.

What’s in it for me?

Start-ups, SMEs, and innovators will have the opportunity to communicate with the partner incubators under the iDEX scheme. You will get a picture of the current defence and aerospace needs of the country. Keep an eye out for hackathons and challenges to be organised by the DDP. Participate in these events to get noticed and to be shortlisted for the scheme.

Last but not the least, start-ups will get to meet with the top brass of the armed forces. You will have a platform to pitch your technologies and products directly to them and to encourage them to adopt your innovations. You will also be able to pitch for assisting and integrating the approved technologies. There will also be a number of outreach activities across India organised under the scheme, for start-ups partake in.

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What Is Cryptocurrency Bill 2021?

Naina Sood — Tue, 16 Feb 2021 06:35:04 +0000

A cryptocurrency is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward.

As India witnesses a surge in the number of cryptocurrency investors and in trading volumes, the Central government has decided to bring a new bill on cryptocurrencies – The Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 – in Budget 2021. Finance Minister Nirmala Sitharaman has said that an inter ministerial committee (IMC) has suggested a ban on private cryptocurrencies in India, like Bitcoin, in India. The committee has pitched for the introduction of an official digital currency that will be appropriately regulated by the Reserve Bank of India.

A high-level Inter-Ministerial Committee (IMC) was constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions. The detailed text of the bill has not been released in the public domain so far.

Key features of the Cryptocurrency Bill 2021

Ban on all private cryptocurrency

The committee has suggested a ban on private cryptocurrencies, like Bitcoin or Ethereum. This might cause a loss to the existing crypto investors in India. However, speaking from a legal point of view, even if the ban is imposed, the crypto holders will still have the option of international exchanges to trade their holdings and there will be no loss of money. Therefore, it would be wise to trade the crypto holdings as soon as possible to prepare for the eventuality of the ban. Also, what is ‘private cryptocurrency’ remains unclear for now as the draft has not been made public.

Introduction of central bank-backed digital currency (CBDC)

The committee has pitched for the introduction of an official digital currency, known as central bank-backed digital currency (CBDC), that will be appropriately regulated by the RBI. While China could officially roll-out its CBDC this year, other leading central banks, including the Bank of England, European Central Bank and the United States’ Federal Reserve, are also working on developing a digital currency. The RBI might also get a digital version of the Indian Rupee in sync with how other countries are trying for their own currencies.

A CBDC can take many forms such as issued on blockchain ledger like private crypto-currencies, a Demat account like in stocks, a specific payments instrument or an account based CBDC. There can be retail CBDCs which would be accessible to all types of consumers or wholesale CBDCs that are meant only for institutions.

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A high-level Inter-Ministerial Committee (IMC) was constituted under the Chairmanship of Secretary (Economic Affairs) to study the issues related to virtual currencies and propose specific actions.

Formulation of a regulatory body/framework

Reporting of sale, trade and usage of the currency to an authority would ensure the identity of participants and the amounts transacted, thereby preventing anonymity in cryptocurrency transactions. The committee has pitched for setting up a legal framework to directly regulate the currency by either RBI and Securities and Exchange Board of India (SEBI).

Digitalisation has led to rapid influx of cryptocurrency in India, especially among start-ups who have been voicing for a proper legislation regarding investment in cryptocurrencies as there is a potential for raising millions through investments made by both Indian and foreign firms.

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RBI’s New Monetary Policy: What is in it for the MSMEs

Shalmoli Sarkar — Tue, 09 Feb 2021 02:35:02 +0000

To revive the growth of Micro, Small and Medium Enterprises (MSMEs) in 2021, the Reserve Bank of India’s recent monetary policy has acted as a safety net to ensure liquidity in the MSME sector, by easing the credit flow.

What is RBI’s new monetary policy for MSMEs?

RBI’s new monetary policy includes measures to support the MSME sector by allowing the scheduled commercial banks to deduct credit disbursed to new MSME borrowers from their Net Demand and Time Liabilities (NDTL) for calculation of Cash Reserve Ratio (CRR).

The definition of new MSME borrowers are those borrowers who have not taken any credit facilities from the banks as of 1st January 2021. This exemption will apply to the MSME borrower who has borrowed up to Rs 25 lakh for the credit extended up to the fortnight ending 1st October 2021, for a period of one year from the date of origination of the loan or the tenure of the loan, whichever is earlier.

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The current year's government spends in the budget emphasizes three sectors i.e., infrastructure, healthcare, and development of financial institutions for infrastructure that will help revive the MSME.

What new monetary policy has in it for the MSMEs?

60 per cent of the startups battled to sustain the business operations and 12 per cent of them had to shut operations as per FICCI, during the pandemic. RBI’s new move to ease the credit flow will benefit the MSMEs as they will have greater access to formal financial banking credit for fulfilling their financial requirement.

RBI’s decision to incentivize the commercial banks will encourage lending of idle CRR funds to MSMEs resulting in receiving loans easily. It also presents an opportunity for the banks to earn more. This gives a new lease of life, as liquidity in MSMEs is not adequate to pay for the loans taken for purchasing machinery.

Working on the similar sidelines, the Ministry of MSME Nitin Gadkari is aspiring to increase the contribution of the MSMEs share in the GDP up to 40 per cent that is currently at 30 per cent.

The current year’s government spends in the budget emphasizes three sectors i.e., infrastructure, healthcare, and development of financial institutions for infrastructure that will help revive the MSME. Apart from the monetary policy, the Indian government has set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to strengthen the credit delivery system that will facilitate the flow of credit to the MSME sector. The credit guarantee under (CGTMSE) will compensate for the loss incurred by a medium scale or small-scale business owner if it fails to discharge its liabilities to the lender.

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Union Budget 2021 for Beauty, Health and Wellness

Smruthi Krishnan — Mon, 08 Feb 2021 00:35:02 +0000

The pandemic hit the Beauty and Wellness sector like an unexpected tide, nearly drowning the industry. Inherently being a touch-and-feel industry, the social distancing norms made it extremely difficult for the industry to function as they require close proximity with their clients. The Healthcare Industry was at a special focus of the Budget owing to COVID-19 crisis that put a strain on the existing industry and highlighted the sheer lack of healthcare facilities in our country. The Budget 2021 came up with several proposals to help develop the Beauty, Health and Wellness Sector.

Primary Pillar:

The Budget proposal for 2021-2022 rests on 6 pillars and the primary pillar is Health and Wellbeing as it has been considered the most important sector of current times. With a holistic approach to cover the health sector, the Budget proposes both Curative and Well Being approaches for prevention of diseases.

PM AtmaNirbhar Swasth Bharat Yojna:

It has been proposed to outlay Rs 64180 crores over 6 years to support health and wellness centres, set up integrated public health labs, establish critical care health labs, strengthen National Centre for Disease Control (NCDC) and to expand health information portal.

The main interventions under this scheme include:

Support for 17,788 rural and 11,024 urban Health and Wellness Centers
Setting up integrated public health labs in all districts and 3382 block public health units in 11 states
Establishing critical care hospital blocks in 602 districts and 12 central institutions;
Strengthening of the National Centre for Disease Control (NCDC)
Expansion of the Integrated Health Information Portal to all States/Union Territories
Operationalisation of 17 new Public Health Units and strengthening of 33 existing Public Health Units at Points of Entry
Setting up of 15 Health Emergency Operation Centers, a national institution for One Health, a Regional Research Platform for WHO South East Asia Region and 4 regional National Institutes for Virology.

Nutrition:

The Supplementary Nutrition Programme and Poshan Abhiyan will be merged and launched as Mission Poshan 2.0. The budget has estimated Rs 2700 crore in 2021-22 for the Nutrition. It has come up with Finance Commission (FC) Grants worth Rs 13192 crore for health.

The department of Health and Family Welfare had been allocated an estimate of Rs 65,012 crore in 2020-21 which has been raised to Rs 71,269 crore in 2021-22, while Department of Health Research has been allocated Rs 2663 crore this year and Ministry of Ayush has been given Rs 2970 crores.

The Budget outlay for Health and Wellbeing is Rs 2,23,846 crores in Budget Expectation 2021-22 as against 2020’s Budget Expectation of Rs 94,452 crores. Thus, exhibiting an increase of 137 percent, a huge increase given India’s Health Sector Status Quo. We hope this brings about a positive change in the health paradigm in the near future.

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Indian Start-ups Run by Indian Founders – Why is Atmanirbhar Digital India Foundation formed?

Aakash Sharma — Sat, 06 Feb 2021 06:35:02 +0000

The fact that the “Big Tech”, or the Four Horsemen as they are often called, are the largest and most dominant “American” companies in the global IT industry has perturbed India’s tech-figures for a long time. And they have now decided to act on shielding the Indian tech-ecosystem from the Four Horsemen– Amazon, Apple, Google, and Facebook’s monopoly. Numerous Indian startups have formed an industry association: the Atmanirbhar Digital India Foundation (ADIF).

Function and Purpose of ADIF

The ADIF will serve as a representative body for Indian tech-based companies and secure the growth and development of a comprehensive and sustainable digital economy that builds real-time productive solutions for the country’s problems. The body will cooperate with the government and sector regulators to provide inputs on the critical legal and policy framework to encourage the digital economy’s growth.

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"This association is committed to building an open, fair, neutral, and self-reliant technology ecosystem that promotes a level-playing field for Indian companies" - Statement from ADIF

Membership and Delegation

ADIF has members such as Murugavel Janakiraman (Founder and CEO, Matrimony.com), Snehil Khanor (Co-founder and CEO, TrulyMadly) Amit Sinha (Co-Founder, Unnati), and Shailesh Vikram Singh (Managing Partner, Massive Fund), among many others.

Understanding the Growth Enablers of Indian startups

The ADIF plans to cooperate with Indian and global research experts to conjecture the growth enablers of Indian startups and empower the ecosystem by eliminating entry barriers to grow, expand, and eventually become self-sustainable. The foundation will function as a link between government and regulatory agencies and protect “freedom of choice” for domestic internet companies.

Strategic Work-Map: Ease of Doing Business

The ADIF also plans to open city-wise modules in the top 25 Indian cities in coming months and expand membership in further drives across India. The organisation aims to create forward-looking administrative means and ease of doing business policies to grow India as the premier stop for innovation and capital.

AIDF’s central goal is to represent the Indian start-up ecosystem, voicing their concerns to the government and regulatory groups and playing a role in forming the sector’s policy framework.

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Union Budget 2021: Fund Allocation for FinTech Sector

Smruthi Krishnan — Sat, 06 Feb 2021 04:18:11 +0000

As our Finance Minister, Nirmala Sitharaman said the preparation of Budget 2021 was undertaken in difficult circumstances. The COVID-19 crisis left the country in a tough spot to revive from. With India already in a slowdown, the economy was pushed into an unprecedented contraction. Surviving the pandemic and moving forward requires a well thought out Budget, one that helps enterprises, companies, producers and consumers recover from the shock. The FinTech sector plays a key role in the revival of the economy especially with its convenience and ease of borrowing, lending and making payments. The Budget has thus stressed upon boosting the digital finance sector in the Post-Pandemic economy. It has allotted Rs. 20,000 crores as capital support to National Banks for Financing Infrastructure and Development.

The FinTech Sector Budgetary Focus Points

Financial Capital Proposals

The committee has proposed to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalized single Securities Markets Code. The Government would support the development of a world class Fin-Tech hub at the GIFT-IFSC.

Reducing Minimum Loan Size for NBFCs

It is proposed to reduce the minimum loan size eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 for NBFCs with minimum asset size of `100 crores, from Rs.50 lakhs to Rs.20 lakhs to improve credit discipline while protecting the interest of small borrowers.

Development of Technology

During the coming fiscal 2021-22, the Government will launch data analytics, artificial intelligence, machine learning driven MCA21 Version 3.0 which will have additional modules for e-scrutiny, e-Adjudication, e-Consultation and Compliance Management.

Promotion of FinTech Start-ups

In order to incentivize establishment of more start-ups in the country, the committee proposed the extension of the eligibility period to claim tax holiday for the start-ups an extra year to 31st March, 2022. To encourage more investment in start-ups, they proposed to extend the eligibility period of claiming capital gains exemption for investment made in the start-ups to 31st March, 2022.

Promotion of Electronics and Digital Payments

To promote usage of Digital payments Major Scheme, the committee has allotted an estimate of Rs.1500 crores in 2021 compared to Rs.512 crores allotted in 2020. For the promotion of Electronics and IT HW Manufacturing the budget estimate is Rs.2632 crore in 2021 as compared to Rs.655 crore spent in 2020. Due to a manifold increase in digital payments in the recent past, to boost digital transactions, it has been decided to allot Rs.1500 crore to provide financial incentive to promote FinTech’s in the digital mode of payment.

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Budget 2021-22: Funds Allocation For Consumer Tech

Naina Sood — Fri, 05 Feb 2021 02:35:02 +0000

The Union budget 2021 was welcomed by the consumer tech industry particularly with the government’s ‘pro-growth’ vision to be self-sustaining and self-reliant in the days to come.

Let us have a look at the measures and announcements aiding growth in the sector:

Boost to tech manufacturing: Production-linked incentive (PLI) scheme, ‘Make in India’

The finance minister announced that the government aims to spend Rs 1.97 lakh crore on various PLI schemes over the next 5 years. This will be an addition to the Rs 40,951 crore announced for the PLI for electronic manufacturing schemes. Under the scheme, eligible players will receive incentives ranging from 4% to 6% of production value for five years, after they achieve their investment and production value target for each year. The move is likely to attract global players in the manufacturing sector and make India globally competitive by attracting investment. The scheme also aims to encourage local companies to set up or expand existing manufacturing units in the country.

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There is a strong focus on Digital India which will provide a solid foundation for a forward-looking data-economy besides giving a much-needed boost to MSMEs and start-ups.

Digital Infrastructure

The government increased the outlay for Digital India programme by 42% to Rs 6806.33 crore for 2021-22. There is a strong focus on Digital India be it through setting a fintech hub at GIFT city, enhancing digital payments and use of AI, ML etc in governance, or making tax appellate faceless and tech enabled – all provide a solid foundation for a forward-looking data-economy besides giving a much-needed boost to MSMEs and start-ups. The suggestion to introduce AI-based features in MCA 21 3.0 to address compliance needs of start-ups is another thoughtful step in creating a conducive business environment for entrepreneurs in the consumer tech segment.

National Language Translation Mission

The government announced the National Language Translation Mission (NTLM) to make governance-and-policy related knowledge available in major Indian languages. The announcement is important to enhance access to digital content to millions of Indian users who are witnessing a spurt in smartphone and Internet usage. An enhanced app store ecosystem, tech companies, especially start-ups, will break linguistic barriers and add more value to the next half a billion Indian customers.

Custom Duties

The budget announced an increase in customs duty (import duty) on mobile phones and power bank sub-parts for FY 2021. The aim is to promote local manufacturing in the country, the rebate on all parts of mobile phones and parts of chargers is being withdrawn. Parts of mobile phones and chargers will now be subject to 2.5% customs duty. Till now, there was no duty on these parts. Increasing custom duty will certainly make it expensive for the companies to procure these mobile parts.

Research and Development

Allocation of Rs 50,000 crore for the National Research Fund for the next five years is a definite step towards boosting the research ecosystem in a coordinated way.

The government also allocated Rs 8,000 crores for National Mission on Quantum Computing & technology and building data centre parks.

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