Presenting her first budget as India’s Finance Minister, Nirmala Sitharaman made some ambitious announcements to encourage development in the technology and innovation space.
Focus on Technology Skills and Research
The government is planning to provide skill training for 10 million individuals in digital techniques such as AI, IoT and big data, which the Finance Minister says will help tackle the IT sector’s severe skill shortage. In sectors that lag behind such as agriculture, this will also increase innovation. In order to promote new innovation research, the government has set up significant funding for the National Research Foundation (NRF). This is a clear indication that the government is taking technology research seriously, lagging far behind countries such as the US and China in terms of patents submitted locally.
Boost to Fintech
BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be used to promote the cashless economy, according to Finance Minister. The digital techniques of making economic transactions should be used by businesses with an annual turnover of Rs 50 crore, which the FM said will be made accessible with merchant discounts and without fees. These discounts will be absorbed by RBI and banks, FM said. The budget has proposed a 2% TDS on money withdrawal exceeding Rs 1 crore in a year from a bank account to encourage electronic payments and discourage cash payments.
Easing Startup and Angel Tax Regulations
Bringing her focus to increase the country’s start-up development, the Finance Minister said no scrutiny will be given to start-ups and investors who file required declarations. The FM also announced that an e-verification scheme will be set up so that no further tax scrutiny will be required for the funds raised by new businesses.When it comes to determining angel tax, this is definitely a start-up-friendly move. Angel tax complications have been a bottleneck for years, and friendly regulation to encourage start-up space investment is a favorable sign for the economy. In order to increase awareness and promotion in the start-up room, the budget has also laid aside resources to launch a television channel under Doordarshan, focusing exclusively on start-up culture and fresh technologies.
Helping Entrepreneurs in Agriculture and Social Welfare
The budget also proposed the establishment of an Electronic Fundraising Platform, a social exchange where entrepreneurs running social welfare firms and NGOs can raise funds for their efforts, either in the form of equity or debt. The social exchange system is still under SEBI evaluation, the Minister of Finance said. In addition, 80 livelihood business incubators and 20 technology business incubators will be established under the ASPIRE system in the agro-rural industry in 2019-20. Under this framework, the finance ministry plans to develop 75,000 qualified agro-rural entrepreneurs.