Budget 2021 makes a good start to encourage innovation: Accel’s Prashanth Prakash

The Indian government has taken a big step to encourage innovation by allocating Rs 50,000 crore to the National Research Foundation in the budget for 2021-22, veteran venture capitalist Prashanth Prakash said on Monday.

“We are woefully under-invested when it comes to innovation,” said Prakash, Partner at Accel, in interaction with YourStory after Finance Minister Nirmala Sitharaman’s budget speech.

“We can keep talking about being the next innovation hub of the world but if we don’t invest enough resources it won’t happen,” he said.

Prakash, who has been with one of India’s most active venture capital firms for more than a decade, also said that India must move up the value chain.

India, he said, has done well when it comes to IT outsourcing or building consumption and B2B businesses. But India also needs a mechanism to commercialise intellectual property, he added.

Prakash said the budget could have included more measures for startups. But he said the government’s push to the healthcare and insurance sectors, as well as support to micro, small and medium-sized enterprises, will help startups.

In the budget, Sitharaman announced several measures for the healthcare sector. These included Rs 35,000 crore for the COVID-19 vaccine and Rs 64,000 crore for a new health scheme. She also said that the government would expand the Integrated Health Information Portal to all states and union territories to connect all public health labs. This, Prakash said, can benefit health-tech startups.

Prakash also welcomed the move to increase the foreign direct investment limit in the insurance sector to 74 percent from 49 percent currently. This will not only help insurers but also insurance-tech companies, he said.

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For YourStory's multimedia coverage of Budget 2021, visit YourStory's Budget 2021 page or budget.yourstory.com.