Union Budget 2021: An Interplay Between Consumerism and Digital Technology
A ‘Digital’ Budget headlined by the mention of Digital Technologies like AI, ML, data analytics, robotics and more - in fueling the purchasing power and giving a fillip to economic recovery & reforms.
Our CFO & Co-Founder - Mr. Ajay Goenka states, “The Budget 2021 announced by the Hon'ble Finance Minister is a highly balanced and far-sighted budget. It positively reflects the Indian Government’s commitment to boost the technology landscape of India.”
So let’s take a look at some Communities/Industries which are going to see a positive change post the Union Budget 2021:
1. The proliferation of AI and ML-based Solutions:
Here are some of the points that are indicative of the growing adoption of these technologies and have made the data science community go abuzz:
# Proposed adoption of Artificial Intelligence & Machine learning solutions by the Ministry of Corporate affairs to reduce regulatory friction, prevent fraudulent activities & improve compliance.
# Setting up of Natural Language Translation Mission to boost the reach of government efforts far and wider in a country of more than 19000 spoken languages.
# Application of Business Intelligence and Analytics solutions to create norms and practices to identify and counter evaders of Taxes like GST.
Ajay welcomed these new norms and opined, “the Government is using AI / BI tools extensively to ensure all transactions come under tax fold and this can also be testified given the highest GST collections in the previous 2-3 months. We welcome the move by the Indian Government to deploy deep analytics and artificial intelligence. This will help companies like ours to take the next leap.”
He further added that the government will also continue investing further in technologies particularly data analytics to ensure all public scheme benefits reach the deserving people.
2. The impetus to Startup Ecosystem:
In line with the objective of boosting the Indian economy through job creation and thereby improving consumer spending, it was a welcome move. Being the third-biggest startup ecosystem, this move holds a humongous potential to provide the necessary impetus to the Indian economy. Here are some key highlights favouring the startup ecosystem:
# The Finance minister announced the extension of tax holidays by another year, till March 2022 for startups. She also extended the window for claiming an exemption for the capital gains from investing in startups till the same time period.
# Revised definition under Companies Act, 2013 to increase startups capitalisation threshold from not exceeding INR 50 Lakh to not exceeding INR 2 Cr and turnover from not exceeding INR 2 Cr to not exceeding INR 20 Cr. It is pegged to help more than 200K startups in easing compliance formalities.
# Change in the definition of ‘Small Companies’ with Paid-up Capital limit extended from not exceeding INR 50 Lacs to not exceeding INR 2 Cr and Turnover limit extended from INR 2 Cr to INR 20 CR.
“The decision to bring in Indian institutional investors to invest in startups will inject growth into the startup ecosystem which has thus far been deeply affected by the ongoing COVID-19 pandemic,” said Ajay.
3. Major Boost for Healthcare, Insuretech & Fintech Industries:
Here are some major investment and push provided in favour of these industries:
# A 137% jump in India’ Healthcare budget to INR 2,34,836 Lac Cr and an additional 35000 Cr can be deployed, if needed, for COVID19 vaccines.
# A long-awaited amendment to the Insurance Act, 1938 was made to extend the permissible Foreign Direct Investment (FDI) in Insurance from 49% to 74%.
# In a measure to boost financial inclusion and digital penetration, the Union Budget 2021 announced allocated INR 1500 Cr to Fintechs. The Finance Minister, Nirmala Sitharaman also proposed a foundation of a world-class Fintech hub near Gandhinagar, Gujarat.
This year’s union budget had a significant focus on emerging technologies starting from the mention of advanced tech (AI, ML, Robotics, EVs, etc) - push towards digital transformation - application of smart solutions to improve governance across Tax collection, agriculture and more.
It will be interesting to observe how the business think tanks respond to these acknowledgments and if it will nudge them towards increasing spends and adoption of these technologies.