A definitive budget that will take into account India’s digital rising
The July 5 Interim Budget 2019-2020 will require a road map that includes new policies, regulations and benefits addressing India 4.0’s emergence in diverse industries.
With Internet of Things (IoT) emerging at a rapid pace, ‘data’ has become the new ‘goldmine’. Today, technology is accelerating the creation of an interconnected, data-centric and self-optimising world and is driving transformational change in the Indian economy with significant development, both, in urban and rural areas. IoT is playing a significant role in current technology transformations. What started as a buzzword a few years ago is the top priority for many governments, including India. It has moved beyond tagging and tracking, and has entered diverse domains, enabling a range of business benefits.
The growth story
Indian IoT startups have grown 10x in the past four years. At present, there are over 1,250 IoT startups, generating considerable revenue not just in India but globally as well, while working on IoT solutions in diverse fields. In its recent suggestions, NASSCOM urged the government to incentivise R&D for IT/ITES companies, and also proposed long term capital gains arising from the sale of shares of unlisted companies be exempt from tax, thereby encouraging investment in startups. This is a sign that the Government needs to pay more attention towards such developments in the upcoming Modi 2.0 budget to be presented on July 5, 2019.
Getting digitally equipped
With an increased focus on Make In India and Digital India, interim Finance Minister Piyush Goyal, realising the potential of emerging technologies, introduced initiatives such as the opening of the National Centre for Artificial Intelligence and building a Centre of Excellence (in collaboration with universities). This move will pave the way for the youth to leverage new state-of-the-art infrastructure, and upskill themselves. Such initiatives will not only take India closer to the vision of Digital India but also widen the talent pool by creating new jobs.
Strategise for the telecom sector
For the telecom industry, the Government needs to publish an implementation plan/roadmap on the various strategies that were outlined in the National Digital Communication Policy 2018. This will enhance India’s foundation to achieve the 2022 strategic objectives and goals defined in the NDCP, and also send a strong message globally of a stable telecom regulatory and policy environment.
Telecommunication is at the core of the IoT sector in India. Easy and affordable access to the latest communication technologies, like 5G, in India, will continue to impact various facets of our lives. The NDCP is an all-inclusive policy which has taken into consideration several aspects essential for the growth and progress of the telecom sector. It explained the need to rationalise levies including licence fees, spectrum usage charges, etc. I believe this has an important role in shaping the evolution of IoT in the country. In addition to this, we recommended the inclusion of modalities to attain 5 million Wifi hotspots by 2020 as well as a collaborative effort on the part of both government and private players for the seamless implementation of 5G networks.
EVs for a green India
Another area the budget should focus equally on is electric mobility. For any economy to grow and thrive, a clean environment is critical. With the Government’s initiative towards a ‘Green India’, electric vehicles will have a major role to play in achieving the goal of a cleaner and greener India. The automotive industry is already feeling the effects of electrification or emobility, both globally and nationally. The industry is on the verge of a paradigm shift from fuel-based engines to zero emission electric vehicles. India, too, is focusing on reducing its excessive dependence on oil imports. Policies and regulations for necessitating attention and action by players across sectors including automobile, power and utilities, oil and gas, etc are crucial. Currently, the EV industry is at a nascent stage, dominated by erickshaws (3W) and two-wheelers (2Ws). However, the market has the potential to grow significantly in the coming years.
Domestic battery supply: To make EVs affordable, batteries must be produced in India, and extensively tested to cope with Indian weather conditions. Only then will there be a scope of affordability. Today, battery manufacturers are largely based out of the US, China, Japan and South Korea. India should strive to develop battery manufacturing facilities to ensure a hassle-free supply of lithium. Electric vehicles are priced much higher than petrol and diesel vehicles. This is largely due to the steep price of batteries that power the electric drivetrain, initial investments in developing new drivetrains and other indirect costs.
Infrastructure: Infrastructure is a key concern most users have. There is no support infrastructure for electric vehicle charging, or is at best, scarce or distant from central locations, even in metros. The easy option of LPG or CNG is also a major driving force to choose them over EVs. Until people are assured that they won’t be inconvenienced due to a lack of charging stations, this push towards buying an EV cannot materialise.
Incentives: Recently, Union Minister Nitin Gadkari had mentioned that “all electric vehicles are exempt from road tax for vehicle registration.” This is a strong indication of the Government’s mindset though it has not yet had the requisite impact. A tax waiver which currently stands at 12 percent GST (even if temporary), would make more people buy EVs, who in turn can be advocates of emobility.
While the government has made statements about its favourable sentiments towards EVs, nothing has been put down in policy yet. Even the 2030 deadline to make each new vehicle in India electric is a statement that requires concrete reforms and regulations to see the light of day.
Although, the interim FM has undoubtedly introduced policies to push the country towards a digital economy, it now needs to fast track the implementation of the policy, get stakeholders on board and push the country forward to unleash countless business opportunities, leading India to its next transformation. The upcoming budget will also need to encourage Indian IT companies to adapt innovation - which is the core, and most important aspect of taking digitisation to an India that is on the cusp of great change.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)