Budget Backs Tech & Emerging Companies

The Union Budget 2022-23 has come across as forward-looking, which intends to focus on a rather long-term plan for the country. Most experts have termed it as progressive, with an objective to widen India's horizons and outlook in the next five years, leveraging the emerging technologies. 

For the startup sector, in particular, the budget announced a few laudable incentives that will offer some strong pillars for the nation’s economic recovery and growth. The time extension provided to claim tax benefits will provide a breather for startups and encourage them to innovate. The packages for entrepreneurship and startups in the budget are also warmly welcomed. Even the announcement on the replacement of the Special Economic Zone Act with new legislation has the potential to make export-led parks attractive for investments. The new benefits are seen to trickle down to technology companies who export services and have a positive bearing on commercial office real estate. 

Digital Stands Out

Elaborating on how the budget has panned out for the startup ecosystem Akash Sinha, CEO, Cashfree Payments says, "It is reflective that India is a digital-first market. But for it to have a long-term impact and bring more people under the cusp of digital, we will first have to begin with digital literacy. Once we are digitally aware, digital banking will follow. But I do appreciate digital inclusion and scaling.

Parallelly, we would also need to push banking that is more personalised and in the local language. This is more of an SST work. The idea is to find a middle point, that semi-human touch and then go all out."

Even Prabhakar Iyer, CFO, Ingram Micro agrees that the budget has brought a rather creative impact with the government embracing the digital systems across. "The way it has removed those intermediary ways to have a faceless touch for B2B with the government and private sector to private sector is a modern way of governing things. Their intent and policy look clear here. We will look at the implementation now, given it is an important development for the digital economy. And for the digital economy to grow, data storage and infrastructure will come to help. This will prove to be a game-changer as it will lead to easy credit availability."

Rupinder Malik, Equity Partner, JSA, on the other hand, believes that the budget has not delivered as much as it should have. "It is more for the grassroots level and social development. Agriculture, education, health, etc. have remained its core. But the highlight has certainly been the introduction of the 'digital rupee'. It should give a huge boost to the digital economy and be an efficient way of digital banking. The way it is implemented will be seen with time. I do expect it to take digital banking to newer heights."
 

Opening Up Of Defence R&D Plays Up

Vinod Sood, Co-Founder, Hughes Systique believes that the budget was more on the positive side with initiatives around the use of drones and opening up of defence R&D to private enterprises, startups and academia. "Earmarking 25% of India's defence R&D spend will spur innovation in a big way and enable deep-tech startups to develop products for the defence itself. This will go a long way in realising the dream of Atmanirbhar Bharat.

The focus on digitisation (of highways, travel, roadside assistance, etc.) will go on to improve growth for multiple segments. This will percolate on the technology sector as well." he asserts.

Admitting that the budget has brought in consistency, Sunil Goyal, MD & Fund Manager, YourNest also thinks that innovation will happen with defence. "If we have to innovate and build some deep-tech companies, the first customer will always be defence. And if the defence allows this R&D, innovation will be continuous," he assures. 

Overall, a positive sentiment floats amongst the tech and emerging companies & entrepreneurs. Budget's focus on this sector perhaps was the need of the hour. With push to this new entrepreneurial spirit, job creation and economy boost will only be a natural consequence.