Budget 2024: Making technology the electricity to power India’s economy | Mint

New Delhi: The government plans to encourage the private sector to develop digital public infrastructure (DPI) apps in core areas of the Indian economy.

These areas include credit, agriculture, ecommerce, education, health, law and justice, logistics, micro-, small- and medium-sized enterprises (MSMEs), services delivery, and urban governance, finance minister Nirmala Sitharaman said during her budget speech on Tuesday. 

The move is expected to help thousands of tech startups, Indian IT services providers, and even the local operations of big tech companies.

During the interim union budget presented in February, the government expectedly did not make any major proposals for the technology sector. But it did indicate it wanted to continue strengthening the country’s DPI by christening it a “factor of production (the others being land, labour, capital and entrepreneurship) in the 21st century”. 

In India, DPI (formerly known as the ‘India Stack’) refers to platforms such as digital identification, payment infrastructure and data exchange solutions including Aadhar, the Unfied Payment Interface (UPI), Account Aggregator, Health Stack, and the Open Network for Digital Commerce (ONDC), built on the Data Empowerment Protection Architecture (DEPA).

Bridging inequality

Having “successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years”, Sitharaman said on Tuesday, the government plans to “step up adoption of technology towards digitalization of the economy”. 

Take, for instance, the easing of credit assessment for micro, small and medium enterprises (MSMEs), and the government’s technology support package to help them grow and compete globally. This is expected to boost the fortunes of tech startups (along with the scrapping of the Angel Tax that will attract more investors) and companies that provide software-as-a-service (SaaS) tools.

So will the increased use of technology in a variety of other fields. These include digitizing land and agricultural records, improving cities, enhancing data collection, data governance, integrating sectoral databases such as those established under the Digital India mission, and setting up an Integrated Technology Platform to improve the efficiency of the Insolvency and Bankruptcy Code (IBC).

In the interim budget, the government had announced the use of deeptech technologies in sectors like defence in a bid to make India self-reliant; continue reskilling the country’s youth; and encourage the private sector to foster research and innovation with interest-free funds. 

This time around, the focus is on agriculture, space, solar, and small nuclear reactors. 

DPI in agriculture

“Buoyed by the success of the pilot project”, the government plans to implement DPI in agriculture with the help of state governments “for coverage of farmers and their lands in three years”, said Sitharaman. 

It also plans to undertake a digital crop survey for kharif crops using DPI in 400 districts. Further, the details of 60 million farmers and their land will be brought into the farmer and land registries, and Jan Samarth-based Kisan Credit Cards will be enabled in five states.

The government also announced that it will introduce “land-related reforms and actions” in rural and urban areas too, including assignment of a Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, and digitization of cadastral maps. 

Further, land records in urban areas will be digitized with geographical information systems (GIS) mapping. The government will also implement an IT-based system for property record administration, updating, and tax administration in a bid to improve the financial position of urban local bodies. 

These moves will particularly help startups and companies that offer mapping solutions, agritech solutions, drone operations and training across diverse sectors like agriculture and infrastructure, and other SaaS and digital tools.

With innovation, research and development (R&D), being made one of the nine priorities of the government, the Rs. 1 trillion innovation fund, too, is expected to promote innovation in spacetech, deeptech and many other emerging technology-oriented sectors. 

Further, the budget announcement of investment in the country’s human capital through ₹2 trillion, too, is of “significant importance”, according to Siddhartha Tipnis, Partner and Technology Sector Leader at Deloitte India. 

He explains that the technology sector is “particularly expected to benefit through the infusion of fresh talent via programmes such as skilling loans, educational loans, internships and participation of women in workforce”.

While there was no mention of artificial intelligence (AI) or quantum technology, the interim budget did provide ample scope for the use of AI tools and advanced data analytics amid government plans to expand and strengthen the country’s electric vehicle ecosystem, the agriculture and healthcare sectors. 

The government has already allocated ₹10,354 crore for the AI Mission in the interim budget, and ₹477 crore for the National Quantum Mission (NQM).