Strengthening the collective vision for an inclusive Digital Bharat, the Union Budget 2022 sets the tone for India’s techade. The government’s sharp focus on technology-enabled development and aligned investments in key sectors like healthcare, fintech, education, infrastructure, R&D, start-ups, agriculture, and manufacturing is a testament to India’s technology prowess and the capabilities of the Indian technology industry to provide a fillip to sectors across.
The budget introduced measures ranging from taxation to investment to help boost the country’s economic activities, digital governance, ease of doing business, ensuring job creation, and marking India’s transition to an inclusive Digital Economy.
Promoting technology-enabled development, energy transition, public-private partnership, focus on skilling, and climate action, the budget echoes the vision for India’s techade encouraging the use of emerging technologies benefiting and readying India. Encouraged to see the government focused on digital skilling to encourage continual skilling avenues, sustainability, and employability through online training, programmes, and industry collaborations, as well as the establishment of skilling e-labs for simulated learning settings. These are positive moves toward making India a global talent powerhouse.
Over the past few years, start-ups and MSME have emerged as drivers of growth for our economy and the bedrock of India’s innovation journey in this Techade. Extension of the tax incentive to another year and setting up an expert committee to scale VC investments will provide incremental encouragement to VC investments promoting start-ups in the country. These steps are taken to help SMEs and Start-ups will go a long way in strengthening the backbone of India’s economy.
The budget also focused on emerging technologies like drones, Deep Tech, Fintech, HealthTech, EdTech, etc. highlighting that India is moving in the right direction of embracing change and innovation. The focus was also laid on 5G technology, as an enabler of growth and development across the telecom and ICT sectors.
PLI Scheme has been viewed as a ground-breaking initiative, and with the government announcing it for 14 sectors, it is expected that the initiative will create over 60 lakh new jobs as well as additional new production of Rs 30 lakh crore during the next 5 years. The move encourages more investment in Indian soil, as the returns seem to be meritorious.
Budget 2022 undoubtedly could be termed as a budget of our times. It is focused on providing India with a strong foundation for the techade and establishing it as a global hub in terms of technology innovation. There were certain points that have been left unaddressed, like – additional focus on industry led R&D in emerging technologies, enabling clarifications to allow units in SEZs flexibility to adopt hybrid work model, easing the taxation of ESOP by making the taxation regime available to all DPIIT recognized start-ups and taxing employees only when they sell the shares. Lack of action on enabling direct foreign listing, and tax parity between domestic and foreign investors are some other things that we believe were not included in the budget.
However, we believe overall this is a healthy budget, with a focus towards the future and we will continue to work with the government to ensure we strengthen the roadmap for a trillion-dollar digital economy by 2026.
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