Union Budget 2023 technology announcements highlights: How Indian tech companies reacted

We congratulate Hon'ble Finance Minister on emphasizing technology-led growth for the third successive year. This transformation will lead to greater use of technology solutions, elevating India’s economic efficiency. The Data Governance policy draft is a welcome step; unlocking data for India’s growth will be crucial. With our expertise in the data domain, we are optimistic about staying ahead of market trends and customer needs in this segment. We have been an integral part of the lending ecosystem; simplifying the KYC process will further fuel the coverage. Our approach of accelerating telecom as one of our core sectors aligns with the government’s call to enhance 5G services further. Our credibility in data integration at scale provides us with a natural head-start in advancing our proposition for this fast-growing ecosystem.

The budget of FY 2023-24 focused on reducing basic custom duty (BCD) on import of certain mobile phone parts and inputs like camera lens and as well as continuing the concessional duty on lithium-ion cells for batteries for another year. This will recognise the importance of self sufficiency in the electronics sector. It believes that increasing the production of televisions, mobile phones , and other electronic devices through these initiatives is essential in boosting the economic growth of the country. The promised announcements to encourage manufacturing have given industry a green signal that will boost confidence and encourage additional investments and provide the subsequent industry to grow.

We applaud the government's emphasis on fostering a digital economy and tech advancements in the Union Budget 2023. The National Education Policy and National Digital Library hold immense potential for expanding education access to the youth.

As an ed-tech company, we are inspired to contribute to making education more inclusive and engaging for students from diverse backgrounds with our partnerships with institutions, foundations, and non-profits. The launch of the "Make AI in India and Make AI work for India" center of excellence is a step in the right direction, providing students and researchers access to cutting-edge technology to tackle India's unique challenges, and enabling industry partners to create AI solutions for the benefit of all.

However, there is a need for the government also to prioritize and support other emerging technologies such as AR, VR, and Metaverse in the tech sector to enhance the learning and retention of concepts in the students.

Today's budget for the first time offered a package of assistance for traditional artisans through the PM Vishwakarma KAushal Samman (PM VIKAS) scheme. This step is in the right direction and will enable artisans to improve their products' quality, scale and reach, integrating them with the MSME value chain. While tax rebates on personal income will benefit the commoner, we were expecting decriminalization of GST and TDS, which were not addressed in today's budget. Moreover, we were concerned about the high cotton prices and hoped a cotton prize stabilization fund scheme would be installed. While the scheme wasn't introduced, the budget announcement spoke about adopting a cluster-based value-chain approach, encouraging collaboration between farmers, the state and the government, which will help reduce fluctuations in natural fibre, making it an overall positive value add.

India delivered a pro-growth budget today with a significant push to capital expenditure to boost the MSME sector in India. Tax revisions announced in the budget are most welcome. The INR 9000 Cr credit guarantee scheme will assist MSMEs in taking tax benefits on expenses incurred to receive their payments. The government has had its ears to the ground and covered a vast gamut of businesses as it reduced the cost of credit to 1%. The newly established infrastructure finance secretariat will assist all stakeholders with more private investment. Investments in Infrastructure will have an enormous multiplier impact on growth and employment. After the subdued period of the pandemic, private investments are growing again. While the affordable housing sector was addressed in the budget, we would have liked to see a similar focus on commercial Infrastructure as well, given the industry's setback during the pandemic.

Union Budget 2023 looks promising for green growth and developing a sustainable ecosystem in India, keeping circularity in focus. The allocation of INR 35,000 crore to achieve the target of Net Zero by 2030 and energy transition seems to be a positive and a good move by the government in imposing a green credit programme under Environment Protection Act that will benefit companies. Since electric mobility is growing in India at a rapid pace YOY and considerably contribute to sustainability, the national green hydrogen program will develop huge potential in lowering carbon intensity and reducing dependency on fossil fuel imports supported by lithium ion batteries for all kind of NEV's. With the increase of funding in green hydrogen, battery energy storage systems with a capacity of 4000 MWh will be supported with viability-gap funding and renewables. The relief from custom duties on lithium-ion cells for batteries for another year will further help in strengthening the industry. Still India would need to focus on recycling of batteries and produce materials in India, to create a sustainable Electric mobility ecosystem in India. The government has also continued its efforts to support start-ups by offering tax benefits by extending the advantage through March 31, 2024.

It is good to see that agriculture remains the core for the budget 2023 with the centre government introducing the setting up of an agriculture accelerator programme to encourage agri-startups by young entrepreneurs. This will, in turn, facilitate easy navigation of regulations and connect all stakeholders in the farm supply chain network. With increasing credit target by 11.11% YoY, Rs. 20 lakh crore; we see this as a positive step to boost growth by allowing access to money that otherwise was capped. Additionally, the advancement in digital payments, development of agri -infrastructure and intel; as an open-source platform with public-private collaboration will ensure a progressive graph for the sector in India. We feel these developments will also encourage higher investment in the sector, both public and private,  furthering its growth this year. Furthermore, introducing new tax slabs is a great initiative that will help increase the public's overall disposable income.

Given that India constitutes the 3rd largest startup ecosystem, we are glad that the government will set up a “Skill India Digital Platform” where digital skills will be expanded and given focus. Setting up a hundred labs for developing applications using 5G services would be an area we at Primebook will look forward to supporting. Moreover, the infrastructure for Digital Library can also be facilitated by PrimeOS; thus, we are excited to see the future of this proposition. There is a need to encourage digitisation on the grass-root level to help reduce the digital divide.  We are glad that the Eklavya Model Residential Schools will be serving 3.5 lakh tribal students and making opportunities more accessible to economically weaker sections. We would have liked to see an allocation to develop smart classrooms because integrating technology for skill development and education is a key way to reach the bottom line and make a real difference. We also missed the government’s push towards the development of infrastructure and education in this announcement which are key pillars for economic growth.

At the center of the Union Budget, 2023-24 is providing measures to improve the business process for MSMEs. The budget announces an overhaul of the loan guarantee plan for MSMEs, which will go into effect on April 1st, 2023 by injecting Rs 9,000 crore in the corpus. This comes as a boon to the industry as it experienced an economic slowdown last year. So the extension of the carry forward of losses on changes in shareholding of startups to 10 years after incorporation from 7 years will help the sector cap on losses and create more fungible profits. Additionally, under the Startup India initiative, Fund of Funds for Startups (FFS) scheme, Startup India Seed Fund Scheme (SISFS) and Credit Guarantee Scheme for Startups (CGSS), the aim is to provide capital at various stages of the business cycle of a startup. We see this as a progressive measure to build a healthy start-up environment in the country.

In the budget 2023-24, we are happy to see a significant inclination towards start-ups and skill development. The government is providing advantage to the start-ups by offering tax benefits by extending until March 31, 2024. This year we also see the demand for workers with digital skills is increasing in a wide range of industries.

We are delighted to see that the government has focussed on developing hundred labs applications using 5G services that will be set up in engineering institutes. To make this more efficient, it is important to train and upskill workers, learners and educators and this step will encourage employment.

As technology in education continues to advance and becomes more relevant, we anticipated that the government would bring an approach that is more substantial in the education / edtech sector.

We applaud the government's emphasis on fostering a digital economy and tech advancements in the Union Budget 2023. The National Education Policy and National Digital Library hold immense potential for expanding education access to the youth. 

As an ed-tech company, we are inspired to contribute to making education more inclusive and engaging for students from diverse backgrounds with our partnerships with institutions, foundations, and non-profits. The launch of the "Make AI in India and Make AI work for India '' center of excellence is a step in the right direction, providing students and researchers access to cutting-edge technology to tackle India's unique challenges, and enabling industry partners to create AI solutions for the benefit of all. 

However, there is a need for the government also to prioritize and support other emerging technologies such as AR, VR, and Metaverse in the tech sector to enhance the learning and retention of concepts in the students.

We are happy to see that the budget 2023 talks at length about decreasing the digital divide by introducing National Digital Libraries that will facilitate access to quality books for children and adolescents across geographies, languages, genres, and levels. Furthermore, the centre's mission to re-envision teachers’ training through innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys, and ICT implementation will help boost the sectoral growth and knowledge sharing with the District Institutes of Education and Training set to be developed as vibrant institutes of excellence for this purpose. Furthermore, we are excited to see that the centre is working towards setting up of three Centres of Excellence for AI (Artificial Intelligence) in top educational institutes. It is a progressive measure that will help boost knowledge sharing and technology development in the education sector. However, we expected substantial measures in the budget for the allocation of resources for the development of technology in the educational sector. This would have supported higher investment and opened doors for new ventures in the industry.

India has evolved to be the third-largest startup ecosystem globally and is one of the leading countries in terms of funding among middle-income countries. The Indian government has been actively working to support the growth of startups in the country. It all began in 2016 with the introduction of "Startup India," which was followed by numerous other initiatives of a similar nature, including the Fund of Funds for Startups (FFS), the Startup India Seed Fund Scheme (SISFS), the Credit Guarantee Scheme for Startups (CGSS), etc. By streamlining procedures and regulations, these initiatives made it easier to do business and to access financing.

Multiple helpful policies have been implemented into the current budget to support the nation's startup ecosystem in light of the continuing inflation and funding slowdown. One of the key points announced by the finance minister is the extension of the date of incorporation for income tax benefits to start-ups from FY23 to FY24. In addition, the government has stated that startups will be able to carry forward their losses for up to 10 years. To accelerate the development of AgriTech firms, an agriculture accelerator fund will be established. The creation of a national data governance policy will make anonymized data available for a range of applications, creating a plethora of business opportunities. These are a few of the significant measures that have been announced this year among many more that will all aim to improve the nation's overall startup ecosystem.

“Make AI in India and Make AI work for India” comes as a positive step towards building a progressive environment in the sector. The goal through the same is to make an efficient Indian AI ecosystem which will be stimulated through skilled workers. With the introduction of 5G services last year, the sector saw substantial growth and investment avenues. Now announcing the establishment of 100 labs for 5G service development will facilitate promising transformation in the telecom sector that will, in-turn, also revamp the setup of private networks in the country. However, we did expect the budget to address the tax relaxation concerns in the telecom sector. Hopefully, we will see eventual measures from the government in this regard.

As a representative of the BFSI industry, I am thrilled to know that the budget is envisioning AI-driven interdisciplinary technical research to develop cutting-edge applications as well as scalable problem solutions. In the post-pandemic scenario, AI helped the BFSI industry to improve consumer experience and streamline operational activities and this additional emphasis on AI and Machine Learning will help the banking industry to expand its service delivery capacity and reach the most underserved citizens. I also welcome the setting up of three centers of excellence for AI and hope India's digital transformation story will benefit from it.

According to Hyderabad-based consumer electronics company pTron’s CEO Ameen Khwaja, while there were no big-ticket announcements for the industry as a whole, the new budget still presents many positive impacts for the country. 

“The invested approach of “Reaching the last Mile” to make the remotest area connected and robust plan to leverage 5G services applications for a digitally strong tomorrow, shall further boost the internet penetration in the rural areas. This shall surely bring a new age of opportunity to the FMCE sector with promising growth due to an increase in demand for FMCE products,” said Khwaja in a statement released to the press. 

E-waste recycling and refurbishing company Cerebra Green joined the chorus of companies lauding the introduction of the Green Credit program. “The move to introduce a Green Credit program, which will be notified under the Environment Protection Act, will definitely be a game-changer in encouraging not only corporate organisations but individuals as well to adopt sustainable practices, including E-waste recycling and refurbishing,” said Ravi Neeladri, CEO of Cerebra Green, in a statement released to the press. Neeladri also hopes that the new policy to replace old pollution-causing vehicles will pave the way for the formal recycling and efficient waste management of automobile parts while creating jobs in the process. (Illustrative image) (File photo)

This Indian Express video will let you know what goods will get more expensive and what goods will get cheaper as a result of the new Union budget.

“The Union budget announced by FM holds great significance for the Fintech sector, as it lays down the roadmap for further growth and development in the industry. Recommendations on adopting a risk based approach for KYC and a system that is amenable to meet the needs of Digital India will ensure measures taken to control potential financial crimes are in line with the risks identified,” said Nageen Kommu, CEO of Bengaluru-based fintech company Digitap, in a statement released to the press. 

According to Kommu, extending incorporation benefits for startups to 10 years will encourage entrepreneurs in the country. Kommu believes that this will also make startups more attractive to investors since a lower tax burden means higher incomes and better returns on investment.

“The green credit program that will incentivise companies, individuals, and local bodies to use sustainable methods will have a positive impact not only in the EV sector but across various sectors, thereby helping the nation move towards a greener and circular economy,” said Avinash Sharma, CEO & Co-Founder of Bengaluru-based ElectricPe, in a statement released to the press. 

Also, according to Sharma, allocating higher funds for investment in energy transition, energy security, and net-zero objectives will provide a boost to the electric vehicle sector in the country.

Muralikrishnan B, president of Xiaomi India, lauded the government’s move to reduce customs duties on certain components that will be used in the manufacturing of cell phones. He also spoke about how dedicated research around 5G, AI and other disruptive technology will boost India’s electronics manufacturing industry.

The Budget builds upon the progress made on the legislative and business front, to further ease compliance requirements. We see that there is a stress to introduce new policies, and introduce schemes to augment India’s proficiency in new age technologies and solutions. The Central Government has long intended for the usage of anonymized datasets, for the benefit of MSMEs, startups, and will introduce the National Data Governance Policy in the coming year, to govern such data collection, distribution protocols. The announcement to constitute 3 centres of excellence for artificial intelligence to augment our capabilities in AI development, testing, will be instrumental towards the Digital India goal as well. Added to this, the KYC processes will adopt a risk-based approach rather than a one-size-fits-all approach, to cater to startups, smaller industry players, and allow players to focus resources, R&D towards the development of the next wave of technologies like 5G, Web 3.0 and Metaverse, which will in turn enhance the growth projections of the country.

The 5G ecosystem in India will get further stimulus from this budget. 100 labs for developing applications using 5G services are to be set up in engineering institutions. These labs will effectively develop 5G services to be implemented in a variety of fields. This holds some potential for private 5G deployment in these institutions and further growth of private networks for research purposes. The setting up of these labs will also help the telecom sector which has been at the center of mobile telephony distribution in India. More than 50 cities in the country have access to 5G services, so these labs will help them cover applications such as smart classroom, precision farming, intelligent transport system and healthcare.

India has made remarkable advancements in the digital realm, evidenced by the surge in digital payments through the Unified Payment Interface (UPI), with a volume of over 7600 crores. The utilization of digital payment methods and the growth of e-commerce and digital startups have also seen a significant boost in the past one year. The COVID-19 pandemic has expedited the integration of digital technology in sectors such as education, healthcare, and the workplace. Despite these positive developments, there are still hurdles to overcome, particularly in terms of digital literacy and internet access in certain regions of the country.

Union budget 2023-24 reflects that the government is profoundly interested in bringing a digital revolution in the education sector and promoting the use of artificial intelligence in education. We are glad that the government’s new budget is in line with India’s ed-tech sector. With the government’s announcement of establishing a National Digital Library for children and adolescents, the ed-tech sector will definitely get a boost; it will create a digital ecosystem in the education sector and encourage digital education. It will largely benefit the students who are lagging behind due to the pandemic. This budget has also highlighted the importance of artificial intelligence in the education sector by announcing the establishment of 3 ‘Centres of Excellence’ for artificial intelligence to enable ‘Make AI for India’ and ‘Make AI work for India’. This step is going to encourage ed-tech companies and start-ups on an enormous scale. The government have introduced the National Data Governance policy which will enable access to anonymized data. The decision of the government to set up 100 labs in engineering institutes for developing apps using 5G services will bring new opportunities in enhancing the concept of smart classrooms and enabling extensive reach of education. However, even as we still wait for the fine print to come out, perhaps the government could have also announced a reduction of taxes on online learning programs as well as incentives for those providing digital education and skilling programs in the private sector.

There were no cryptocurrency-related announcements at the Union Budget 2023 presentation, and the previous rules and regulations will continue, which include a 30 per cent tax on profit.

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.

1. Big jump in capex

With the government announcing a 10 lakh crore capex budget, which amounts to 3.3% of the country’s GDP and the highest ever outlay for railways and development of over 50 airports, helipads, aerodromes, etc,  it is evident that the government is focused on upgrading the country. This has been supported by the development of last-mile connectivity and a push to the tourism industry. There have been multiple schemes and allotments of budget towards entrepreneurial ventures and to the youth of our country as well as collateral-free credit to MSME’s. However, no support has been extended towards the existing private sector setups in policy terms.
The government's initiative to Make AI for India is a welcome one and will help in achieving development in rural as well as urban areas. Policy support has been provided to all by reducing compliances and the suggestion to amend 42 central acts which will be a welcome change from an operational perspective.

2. Customs duty on open cells of TV panels cut to 2.5 percent 

The reduction in duty on open cells is a very welcome one and will help in competing with the volatile international panel market as well. A reduction in GST for higher-sized televisions is still something we look forward to and urge the government to reconsider.

Customs duty relief for certain inputs for camera lens, lithium batteries to continue for another year.

Expansion of Digi locker services to the Fintech sector will be a great boost for individuals, banks and financial institutions to store and share data online in a secured and faster manner.

The budget brings laser sharp focus to AI led skill-development by announcing the establishment of three centres of artificial intelligence. Foreseeing the spurt in AI based employment opportunities in the future, Veative Group has devoted 1 million+ manhours over the past decade to create a digital ecosystem in AR/VR, applications for training and development, along with making educational content in VR available globally. We are all set to launch the world’s first careers metaverse in July 2023 that promises to connect enterprises with school-going learners. We wholeheartedly support the govt in making India a leading digital force of reckoning in the world.

EVs to become cheaper in India for another year hence, we can expect to see more affordable EVs in the coming days

Govt to set up National digital libraries to help digitalisation of education as a part of the digital India initiative.

DigiLocker will now support more documents and will also be used for storing and sharing documents whenever needed.

National data governance policy: KYC process will be simplified and a one-stop solution for the identity and address update process via the DigiLocker application.

Make AI in India, Make AI work for In India will be setup in top educational institutions to develop cutting edge applications in the field of agriculture, health, and more.

Finance Minister @nsitharaman Ji is presenting the Union Budget in Parliament.