The Union Budget is India’s most awaited, and often the most debated, policy announcement. Industry leaders and economics experts lay threadbare the provisions and their likely impact, live on television channels. Stock-markets respond immediately and everyone tries to figure out what the budgetary proposals would translate to. Later, as the dust settles, some finer points emerge and new revelations pop up, often with a better understanding.
For a closer understanding of the budget, one must look at the vision government shares, in addition to the financials. Let’s take a look at 5 statements that we think are key to Union Budget 2018.
The top 5 policy statements in the Union Budget and what they mean for industry
- The early lines pretty much sum the vision of the Union Budget 2018: “focus on strengthening agriculture and rural economy (and) infrastructure creation.”
Implications: The government is betting big time on agri-based businesses and is willing to extend sizeable support by way of policy, taxation and infrastructural improvements.
- “Online loan sanctioning facility for MSMEs will be revamped”
Implications: The government is looking forward to building a better ease-of-doing-business environment for the MSMEs by easier, faster advances.
- The government “will take additional measures to strengthen the environment for their (Venture Capital Funds (VCFs) and Angel Investors) growth and successful operation of alternative investment funds in India”.
Implications: The key role VCFs and Angel Investors play in nurturing startups is being formally acknowledged. The government will attempt facilitating their initiatives.
- “To invest in research, training, and skilling in robotics, artificial intelligence, digital manufacturing, big data analysis, quantum communication and internet of things, Department of Science & Technology will launch a Mission on Cyber-Physical Systems to support the establishment of centers of excellence.”
Implications: The fine details for the Centres of Excellence (CoE) are still awaited but, with the right momentum, this could be a game-changer.
- “NITI Aayog will initiate a national program to direct our efforts in the area of artificial intelligence, including research and development of its applications.”
Implications: Getting NITI (National Institution for Transforming India) Aayog into promoting Artificial Intelligence (AI) signals the government is both keen and bullish on AI.
The top 5 numbers in the Union Budget and what they mean for industry
- Doubled the allocation on Digital India programme to Rs 3073 crore in 2018-19”
Implications: In itself, the fund of Rs 3,000 crore may not look huge, but when combined with the vision mentioned above (item #4) and the fact that Rs. 85,010 crore have been allocated to education, the significance of this number grows substantially.
- “Provided Rs 10,000 crore in 2018-19 for creation and augmentation of Telecom infrastructure”
Implications: Since the government is readying up for Fifth Generation’ (5G) technologies and its adoption, this amount probably comes at the right time. The speed of implementation, however, may be decisive.
- “Allocation by Ministry of Food Processing, being doubled to Rs 1,400 crore”
Implications: This, and the other initiatives mentioned later in this post points to a bigger opportunity for food- and agri-centered startups.
- “The Government also proposes to set up 5 lakh WiFi hotspots, providing broadband access to five crore rural citizens.”
Implications: Wifi for rural citizens and focus on agriculture reiterate the growing number of opportunities that await agro-based enterprises.
- “Companies that reported a turnover up to Rs. 250 crore in the financial year 2016-17 will enjoy a corporate tax of 25%”.
Implications: There are nearly 30 million establishments in India’s informal economy. How they benefit and respond in kind is something that needs to be seen.
Now that we have the bigger picture, let’s look at some of the specifics and figure out what they mean for the IT industry, more specifically for AI, Machine Learning (ML), Robotics and IoT.
While it’s not exactly late, it certainly is high time India wake up to the opportunities in AI, ML, Robotics, and IoT. Consider, for instance, Operation Greens that is being proposed on the lines of Operation Flood. Operation Greens seeks to promote processing facilities and agri-logistics. In other words, it is an important step in the direction of the sophisticated farm-to-the-dining-table model.
Robotics has plentiful opportunities in agriculture: for instance, robots, empowered by ML take care of harvesting in a much better way than humans. ML also can help significantly in managing the soil hygiene by measuring its key components. Big data analytics cab hugely improve our ability to understand and predict the impact of climate change or changes in rainfall patterns – something that a large proportion of farms in India rely heavily upon.
The government is pumping in Rs 500 crore in Operation Greens, to begin with, and will certainly reward innovation. Innovative AI solutions can both speed up and simplify processes, irrespective of the industry. For instance, we recently designed an AI-based app for a supplier of shoes to the armed forces of Malaysia, which dramatically changed shoe-ordering!
Opportunities in Education
Finance Minister, Arun Jaitley categorically emphasized his government’s roadmap for education. The government intends to provide Eklavya Model Residential schools for every tribal block by 2022. It’s important to note these schools will be at par with the reputed Navodaya Schools!
Education doesn’t just provide skilled people to industries, it also generates parallel industries. For an instance, we see a lot of scope for ML and AI for upgrading teaching skills. Think of the online courses that can be designed and delivered, using these technologies. And the experience of learning need not be flat and uni-dimensional; technology can make the entire experience a great deal more engaging with Augmented Reality (AR).
We recently leveraged AR for an esports company to create an immersive experience for live events from anywhere. Imagine the thrilling prospects it can throw up when used for educational institutions! One can help the Indian government reach the ambitious targets – and do so profitably.
Growth Across All Levels
On the one hand, the government has an outlay of Rs.2.04 lakh crore for Smart Cities. A total of 100 Smart Cities will benefit from this. Various projects like Smart Command and Control Centre, Smart Roads, Solar Rooftops and so on will drive growth, foster innovation, provide much-needed impetus and present a range of entrepreneurial opportunities in the urban areas, along with the AMRUT program.
On the other hand, the government is determined to “focus on the rural economy”. For example, railways is one link that efficiently connects the rural and urban areas of India. An amount of over Rs 1.48 lakh crore has been earmarked for railways. One of the dozens of improvements this amount will bring is WiFi on railway stations. It’s an important step in helping people from villages to access the internet.
Combined, these initiatives will go a long way in reducing the digital divide: urban India and rural India. If implemented efficiently, one can safely say there’s going to be numerous opportunities for startups as well as established enterprises.
Of course, this budget has its own limitations, just like every other budget. We choose, however, to focus on the brighter side where the opportunities lie. We believe India Inc is changing, the young workforce is changing and everyone is enriching their skills. The government seems to have come up with right intentions; a great deal depends on what businesses make out of it. When a government budget talks about blockchain, AI, AR, IoT and so on, you know resources, not necessarily sufficient, are backing the willpower of the government. And that should be exciting enough!
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