Budget 2023 Special💰
Summary of budget statements regarding technology and startups.
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Budget 2023: What it means for Startups?
Finance Minister Nirmala Sitharaman tabled the Union Budget 2023-2024. Just like previous union budgets, this fiscal year, too, extensively focuses on technologies such as 5G and fintech. There is also a focus on startups. Cryptocurrencies, however, did not find mentioned in the budget.
Here is a round-up of budget announcements relating to technology and startups:
The Indian government is setting up an agriculture-focused digital public infrastructure as an open-source, open-standard, and interoperable platform. The objective is to aid farmers-focused solutions leveraging information services for crop planning and health, better access to farm inputs, credit, and insurance, crop estimate, and ultimately propel agritech startups, and the overall industry.
The government announced setting up an agriculture accelerator fund to support agri-startups in rural areas. The move aims to bring in more modern technology and affordable and innovative solutions to support the agriculture sector.
Concessions to startups
The government has proposed to extend the date of incorporation for income tax benefits to startups by a year from March 31, 2023 to March 31, 2024.
“I further propose to provide the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years,” the minister said while presenting the budget.
With telecom players like Airtel and Reliance Jio already rolling out 5G services, the government is looking to tap into the fifth-generation mobile network for different sectors. The government will set up 100 labs to develop apps based on 5G. These apps will cover use cases such as smart classrooms, precision farming, healthcare, and intelligent transportation systems.
The Make in India push is now being extended to artificial intelligence. The government has planned to set up as many as three centers of excellence for AI under a campaign titled ‘Make AI in India and Make AI work for India’.
The minister said that top industry players will partner to conduct “interdisciplinary research, develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities.”
National Data Governance Policy
The government will soon come up with a national data governance policy under which it will share data (anonymized) with researchers and academia.
The government is also extending the scope of DigiLocker, a citizen’s digital document wallet, to assist innovation in the fintech industry. Soon, there will be an Entity DigiLocker that will allow MSMEs, large businesses, and charitable trusts to store and share documents with authorities and regulators, banks, and other business entities.
Electronics (mobile phones, TVs)
Building on aspirations to push India as an electronics manufacturing hub, the government has announced relief in customs duty on the import of certain parts and inputs, such as camera lenses, and extended the concessional duty on lithium-ion cells for batteries for another year.
Sitharaman disclosed mobile phone production in India grew from 5.8 crore units valued at about Rs 18,900 crore in 2014-15 to 31 crore units valued at over Rs 2,75,000 crore in the last financial year.
Like mobile phones, Sitharaman said the government will reduce basic customs duty on parts of open cells of TV panels to 2.5% from 5%.
With electronic vehicles taking off in India, the government has extended customs duty exemption on importing capital goods and machinery used to manufacture lithium-ion cells for EV batteries.
This drop in cost is expected to aid the growth of electric vehicles in India. “Customs exemption on capital goods and machinery for lithium batteries will reduce the per kilowatt-hour cost of batteries and thus accelerate EV adoption in both personal and commercial segments,” Fyn mobility CEO and co-founder Visakh Sasikumar said in a statement.
The government is also encouraging drone startups through the ‘Drone Shakti’ program which includes building various applications and leveraging Drone-As-A-Services (DrAAS). Soon, select ITIs across all states requisite skilling courses will be launched.
Also, the government will encourage the usage of ‘Kisan Drones’ for purposes such as crop assessment, digitization of land records, and spraying of insecticides, and nutrients.
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