Budget 2023: FM Lays Down Vision For Tech-driven Development Via AI, Data Governance

Finance Minister Nirmala Sitharaman on Wednesday laid down the vision for ‘Amritkaal’ which included “technology-driven and knowledge-based economy”. This includes some plans for pushing the envelope on artificial intelligence (AI) and enhancing data governance.

AI

At the Budget 2023 in the parliament, the FM announced a series of measures intended to encourage innovation in AI. She said that three Centre of Excellence (CoE) for AI would be set up at top educational institutions.

In addition, Sitharaman said that leading industry players would partner in conducting interdisciplinary research, develop cutting edge applications and scalable problem solutions in the areas of agriculture, health and sustainable cities.

She said that the measures would “unleash the potential” of the Indian economy by manifesting an effective AI ecosystem and nurture quality human resources in the field.

Commenting on the development, Rajsri Rengan, Head of Banking and Payments, India and Philippines, FIS said, “The government has announced on establishing centres of excellence for Artificial Intelligence (AI). Innovative digital technologies like AI, and Machine Learning is a big step towards promoting financial inclusion in India, enabling industries across sectors to become accessible to a wider section of population. This will result in boosting service delivery and enable various sections of society to actively participate in financial ecosystems.”

National Data Governance Policy

Sitharaman during the Budget 2023 address also said that National Data Governance Policy will be brough out in the present year to augment innovation and research by startups and academia. 

“This will enable access to anonymised data. The KYC process will be simplified, adopting a risk-based (approach) instead of one-size-fits-all approach. The financial sector regulators will also be encouraged to have a KYC system fully amenable to meet the needs of ‘Digital India’,” she said.

The FM also announced that a new solution for identity and address updating would be established.  This one-stop solution will be for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators, and regulated entities via the DigiLocker service and Aadhar as its foundational identity.

She said that PAN would be used as the common identifier for all digital systems of specified government agencies. “This will bring ease of doing business and it'll be facilitated through a legal mandate for updating the need for separate submission of same information to different government agencies,” the FM expalined.

Commenting on the announcement, Divam Sharma, founder at Green Portfolio, said “A one-stop solution for identity using Digilocker and Aadhar was needed for a long. We have seen huge documentation processes for every bank transaction, borrowing through loans, making investments, buying insurance and any large-value goods etc. This is a positive for BFSI companies.”

Sitharaman also said that the system of unified filing process would be set up. 

“Such filing of information or return in simplified forms on a common portal will be shared with other agencies as per the filer's choice,” she added.

In a statement, Pankaj Vasani, Group CFO, Cube Highways InvIT said, “It brings optimism and reflects the government’s robust approach and continued focus on infrastructure, sustainable development, and inclusive growth through a tech-enabled economy. It is encouraging that our government has taken positive steps toward creating a circular economy and is taking concrete steps towards ease of doing business in India. I hope this will stimulate continued growth, prime the wheels for the entire economy, and have a multiplier effect.”

Manufacturing 

The FM also highlighted various initiatives of the Centre, including the phased Manufacturing programme. She said that mobile phone production in India has increased 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. 

To enhance and deepen domestic value addition in manufacturing of mobile phones, the Budget proposed to provide relief in customs duty on import of certain parts and 30 inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year. 

“Similarly, to promote value addition in manufacture of televisions, I propose to reduce the basic customs duty on parts of open cells of TV panels to 2.5 per cent,” Sitharaman said. 

The government has also taken steps to rectify inversion of duty structure and encourage manufacturing of electric kitchen chimneys. The basic customs duty on electric kitchen chimney has been increased from 7.5 per cent to 15 per cent and that on heat coils for these is proposed to be reduced from 20 per cent to 15 per cent. These hikes in customs duty could make locally manufactured products competitive.

“From investments in setting up CoE for AI in top universities, 100 labs for 5G applications, Rs 35,000 crore for energy transition to concessions on equipment for Lithium-Ion cells. It is encouraging to see reduction in custom duties for inputs/parts of certain electronic items like lithium-Ion batteries, TV, Camera Lens will improve the feasibility for enhancing backward integration and subsequently enabling local manufacturing of electronics,” said Manish Sharma, Chairman, Panasonic Life Solutions India, Chair for the FICCI Committee on Electronics & Manufacturing.