India Advances With Its Innovation Culture
With a strong emphasis on technology innovation, the cornerstone for a major transformation of the Indian economy has been laid in the Union Budget 2018. While the previous budget encouraged an innovation-driven approach, the current budget has seen a follow-through in the form of an assertive direction and a focused methodology towards fortifying India’s innovation culture.
Firstly, recognising the catalytic role that fintech companies have played globally, the Union Budget has, for the first time, laid the foundation for policy enablement and creation of an institutional framework for fintech companies to scale and at the same time create an impact for MSMEs to deliver growth and enable job creation. In order to further catapult India’s fintech revolution, it is imperative to break barriers of innovation though revolutionary models. Creation of a ‘regulatory sandbox’ could serve as a ‘safe space’ wherein fintech businesses can test innovative products, services, businesses and operational models without having to face the usual regulatory consequences. A pro-innovation outlook laced with bold policies, as outlined in the Budget, will advance fertile ideas to thrive through a smoothened experimentation phase.
Secondly,the Budget has highlighted steering the strategic focus towards futuristic technologies such as blockchain, artificial intelligence, Internet of things to usher in Digital India in true sense. Usage of these cognitive technologies to provide targeted public infrastructure solutions and funding can bring maximum social impact and development at the bottom of the pyramid. A case in point is Dubai, which is moving towards becoming world’s first blockchain-powered government, a strategy that can potentially save 25.1 million man hours, or $1.5 billion in savings per year for the Emirates. Going ahead, these technologies should become an integral ingredient in India’s overall development agenda.
Thirdly, the budget has re-emphasised on the germinating role that VCs and angel investors play in creating an innovation ecosystem. The initiative to design a separate policy for hybrid instruments to attract foreign investments in niche areas, especially for startups and venture capital firms, would ensure adequate capital support for young businesses to scale. Additionally, extending the incorporation date for startups to 31 March, 2021 from 31 March, 2019, in order to avail benefits under section 80-IAC would help and nurture future pipeline of innovations. Further, the proposal to rationalise conditions of turnover to avail benefits would provide entrepreneurs with much-needed boost to further innovate and carry-out sustainable business operations with robust financial models in place.
Fourthly, launch of Mission on Cyber Physical Systems (CPS) would foster and promote R&D through dedicated Centres of Excellence. These centres can unleash vast economic and societal potential and bolster national security. Building on this, the doubling of allocation to Digital India to more than Rs 3,000 crore would have a multiplier effect.
Amidst tectonic shifts in global economic policies and rapid digital advancements, bold policy measures adopted in the past year have laid the foundation for a dynamic and vibrant India. With India’s aspirations of becoming the cradle for futuristic innovation and delivering affordable and quality services to 1.3 bn people, creation of an innovation-based ecosystem is of paramount importance. I believe India has effectively galvanised these technological advancements into policy framework, with the ethos of design, innovation and creativity led entrepreneurship.
This budget has provided a major boost to “Digital India” in its attempt to make ‘innovation culture’ in India mainstream and has created a unique window to generate entrepreneurial opportunities for its vast young population.
