Budget 2024 Places Increased Emphasis on the Deep Tech Sector, Industry Reacts

Nirmala Sitharaman, Finance and Corporate Affairs Minister, Government of India, while presenting the Interim Budget 2024 unveiled a series of strategic announcements aimed at bolstering the growth and innovation within the deep tech sector in India . The budget, for the fiscal year 2024, outlines the government's commitment to fostering a technology-driven ecosystem and positioning India as a global player in cutting-edge technologies, she said. A corpus of ₹1 lakh crore to be established with a fifty-year interest-free loan for boosting private investment in sunrise technologies, and a new scheme to be launched for strengthening deep-tech technologies for defence purposes and expediting 'atmanirbharta'

Sitharaman allocated a substantial increase in funds for research and development in the deep tech sector. The infusion of capital is expected to catalyze breakthroughs in areas such as artificial intelligence, quantum computing, and biotechnology. “Deep tech innovation is transforming sectors such as Deep Tech, Healthcare, and Clean Energy are bolstering India's global economic competitiveness. In the interim Budget 2024, tax rates, including import duty, remain steady. However, start-ups will benefit from tax exemptions for specific IFSC units that are extended to March 2025. FM Sitharaman has allocated Rs 1 lakh crore for interest-free loans, stimulating private sector research that would particularly aid deep tech startups. The economic policies aim to sustain growth, foster inclusive development, enhance productivity, create opportunities, and generate resources for investments and aspirations,” said Gaurav Sahay, Practice Head (Technology & General Corporate), Fox Mandal & Associates.

In the same vein, Anirudh A Damani ,Director, Artha India Ventures said that the Finance Minister has adeptly spotlighted the government’s dedication to pivotal sectors poised to elevate GDP growth, with a particular focus on empowering youth, women, and micro-entrepreneurs. “This commitment is further enriched by an ambitious agenda to enhance digital infrastructure, aiming to foster entrepreneurship nationwide and boost employment opportunities. Notably, the budget’s provisions for EV and deep tech sectors signal a continued allure for venture capital in startups, reinforcing investor confidence. The introduction of a Rs 1 lakh crore corpus for long-term, interest-free loans emerges as a landmark initiative, promising to invigorate entrepreneurship in tier 2 and 3 towns. Our experience over the past decade affirms the high potential of these regions as the cradle for India’s next 100 unicorns, where access to early-stage capital has remained elusive. The government’s move to provide interest-free loans is a game-changer, not only facilitating capital accessibility but also encouraging deeper penetration by institutional investors in search of disruptive startups. This strategic intervention is poised to reshape India’s entrepreneurial landscape, heralding an era of widespread innovation and growth,” he said.

Additionally, Manoj Nair, Head of India GDC, Fujitsu India, said: “We welcome India’s Union Budget 2024-25 unveiled and applaud the Indian Government for putting digitalization, inclusive and sustainable development, and enhanced capabilities and contribution to the generation of resources to power investments at the core. As the demand for tech talent surges, the Government’s Skill India Mission has played a pivotal role in stemming the talent gap in the IT industry. With 1.4 crore youth upskilled and reskilled the announcement of higher learning institutions including IITs and IIMs will help India address the AI skill crunch and bridge the gap effectively. Additionally, the Government’s corpus of Rs 1 lakh crore with a 50-year interest-free loan will encourage the private sector to scale up research and innovation significantly in sunrise domains. This will be a big boost for tech-savvy youth and help the Nation strengthen capabilities in the deep tech sector. The government’s continued focus on EV ecosystem is indeed a pragmatic step forward and will continue to help India succeed in achieving its long-term decarbonization objectives. This is an exciting time for the country's green industrial and economic transition.”