The government will release a policy on battery swapping and electric vehicle (EV) infrastructure interoperability standards that will accelerate the shift from fossil-fuel vehicles to EVs.
IIndian Finance Minister Nirmala Sitharaman made no blockbuster announcements regarding the tech sector or startups in her budget proposals on Tuesday, but certainly acknowledged their increased importance to the country’s economy and to the long-term sustainable development.
His budget proposals for the coming fiscal year, which begins April 1, included several additional measures to make life easier for entrepreneurs and to introduce cutting-edge technologies in multiple areas, from digital banks and military platforms to sustainable cities of the future. .
Advanced technologies in multiple fields – from artificial intelligence (AI) and clean technologies to genomics – “have immense potential to contribute to large-scale sustainable development and modernize the country,” Sitharaman said. “They provide employment opportunities for young people and make Indian industry more efficient and competitive.”
The latest budget would be the first stepping stone for building a modern India over the next 25 years, when the nation marks the 100th anniversary of its independence, she told parliament. As part of this vision, the government aims to “promote digital economy and fintech, technology-enabled development, energy transition and climate action,” Sitharaman said.
Battery Exchange Policy
Specifically, the government will release a policy on battery swapping and electric vehicle (EV) infrastructure interoperability standards that will accelerate the shift from fossil-fuel vehicles to EVs.
“The central government’s continued push for electric vehicles and climate action is commendable, and the same outlook has also been echoed in this year’s Union budget,” says Akshay Singhal, Founder and CEO of Log9, an aluminum fuel cell and electric vehicle charging technology startup in Bangalore. “The openness the government has shown to adapt to new era business models like battery swapping is a welcome step, and the push to encourage battery-as-a-service and energy business models as a service will give additional impetus to emerging local startups in these areas.
Financial decoupling of batteries, independent of the exchange, has the potential to enable faster adoption, he adds. Singhal expects climate-focused lines of debt from blended finance in the coming days. The introduction of electric vehicles and batteries into India’s “priority loan” category could also have been done in this budget, but it was a failure as far as the electric vehicle sector is concerned, he says.
The government will also broadly encourage everyone to use public transport – alongside developing multi-modal transport options – and will also push for clean-tech based vehicles. As India rapidly moves towards a scenario where more than half of its population will live in urban areas, cities must be seen as hubs of sustainable living, the minister said. The government will assemble a team of experts to make recommendations on how to achieve this.
On the other hand, the government aims to ensure that villages have the same access to online services as those available in cities. This year, it will intensify the distribution of contracts for the construction of fiber optic networks under the Bharatnet project to bring broadband services closer to more villages.
Villages will also benefit from more high technology, with the use of “Kisan drones” (drones for farmers) for crop assessment, digitization of land records, spraying of insecticides and nutrients. The minister also proposed a fund with mixed capital, raised under the co-investment model, which will be facilitated by Nabard, India’s bank for agriculture and rural development. This fund will finance agri-tech startups relevant to the agricultural commodity value chain, she said.
Startups will also have greater access to India’s defense budget, the minister said, as the country seeks to design and develop more of its defense technologies locally and reduce its reliance on imports. In the next fiscal year, 68% of the capital procurement budget will be reserved for domestic industry, up from 58% in 2021-22.
Defense research and development (R&D) will be open to industry, startups and universities, with 25% of the defense R&D budget earmarked for it. Private industry will be encouraged to undertake the design and development of military platforms and equipment in conjunction with the Defense Research and Development Organization (DRDO) and other organizations through a special purpose vehicle model, Sitharaman said.
To support the wider cutting-edge technology ecosystem in India, the government will follow a lean regulatory approach to support startups and companies in the fields of AI, geospatial systems and drones, semiconductors, economics, genomics and pharmaceuticals, green energy and clean mobility. systems.
To support funding in some of these areas, such as climate action, deep tech, digital economy, pharma and agri-tech, the government will encourage thematic funds for blended finance, the government share being limited to 20% and the funds being managed by private fund managers.
And as the country moves closer to rolling out 5G wireless, manufacturing of related technologies will be included in India’s product-related incentive schemes, the minister said.
In other emerging start-up areas in India, a working group is to be set up for the animation and games industry. Overall, a three-year tax incentive that was available to startups that started before March this year, has been extended to include companies that are incorporated before March 2023.
Public spending on IT
The latest budget proposals also show that the government’s own investments in information technology will be stepped up in several areas, including agriculture, education, healthcare, logistics and procurement. Improvements to existing online portals and platforms as well as the development of new ones are planned.
These aim to offer high-quality electronic content for education in regional languages, the establishment of a digital university, tele-mental health services, real-time logistics information and online purchasing management. end to end.
“The budget sees information technology as the main driver of growth,” said Waman Parkhi, indirect tax partner at accounting firm KPMG in India. The focus is on reducing compliance, standardizing – state and central government portals will talk to each other – and using IT to improve the efficiency of operations in the economy, says- he. This approach would require less additional investment, but the returns in terms of growth would be much higher, he adds.
A notable area of government investment is fintech, a booming sector in India. The finance minister has proposed to set up 75 digital banking units in 75 districts across the country, to mark the 75th anniversary of India’s independence. The government also plans to integrate all 1.5 lakh postal branches in the country into a central banking system, enabling them to offer internet banking and mobile banking services.
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