More data center parks, develop AI talent: Union Budget 2020

The Union Budget 2020 was announced today, and special emphasis was paid to data centres, artificial intelligence and employment

DQI Bureau
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Data Centers

Here are some quotes by the Indian industry on the Union Budget 2020


Sharad Sanghi, MD and CEO, NTT-Netmagic

As India's leading data center services provider, we welcome the government's proposal to roll out a policy enabling the private sector to build data center parks throughout the country. This move rightly acknowledges how integral data is to every sector of the economy at a very opportune time. Government initiatives like Smart Cities and Digital India, policies around data localization and the digitization of various industries such as financial services, e-commerce, media, and the manufacturing sector have fuelled the demand for the data center industry in India. We at NTT - Netmagic currently operate nine data centers in the country, and have plans to double our data centre capacity in the coming months to meet the growing demand.

The budget has also given a massive push to the digital economy recognizing how AI, IoT, 3D printing, drones, data storage, and quantum computing, etc., are all re-writing the world economic order. Overall, the budget is pro-startups and forward-looking in terms of growth across technology sectors.


CP Gurnani, MD and CEO, Tech Mahindra

With a thrust on talent, technology and entrepreneurship, Budget 2020-21 is a promising budget in support of making India’s $5 trillion economy dream come true. It is heartening to see initiatives that are aimed at enhancing digital penetration in the country by making Fibre to the home (FTTH) accessible to 100,000 Gram Panchayats via Bharat Net, which will go a long way in bridging the digital divide. Also, the decision to build data centre parks for the private sector is another step towards making India a data economy superpower. Furthermore, strategic initiatives aimed at leveraging new-age technologies like the Internet-of-Things, machine learning, robotics, bioinformatics, quantum computing and artificial intelligence across sectors will further help in laying the foundation of a robust, digital economy.

Sridhar Pinnapureddy, Founder and CEO, CtrlS Datacenters


We congratulate the Union Finance Minister, Ms. Nirmala Sitharaman, for presenting a path-breaking policy focused on boosting the economy through new tax slabs. We welcome the announcement on the data center park policy, national mission on quantum technologies and applications, fibre to the home (FTTH) connections through Bharatnet, linking 100,000 gram panchayats, which will help bridge the digital divide.

We heartily welcome the government’s proposal to roll-out the data center park policy. At CtrlS (Asia’s largest rated-4 datacenter), we are doubling the industry footprint from 5+ million sq.ft to 6 million sq.ft by adding new rated-4 hyperscale datacenters in the country, powered by a combination of conventional power and solar. We are planning a 2 million sq.ft datacenter in Mumbai, another 2 million sq.ft in Hyderabad and a 1 million sq.ft in Chennai. At least 25% of our power requirements in all our facilities would be met through new solar parks being invested by us. Our solar parks initiative is aimed at reducing the carbon footprint.

The likely policy on data center parks, combined with the anticipated personal data protection (PDP) policy, will help India emerge as world’s largest data center hub, generate employment, and significantly contribute to the country’s growth and vision of evolving as a $5 trillion economy.


Sanjay Jalona CEO and MD, L&T Infotech

Acknowledging the influence of technology in shaping new age economy is a distinct aspect of the Union budget. Focus on artificial intelligence and targets set for quantum computing is a step in the right direction to strengthen India’s position as a frontrunner in exponential technologies. From IT services perspective, it will be interesting to see if setting up more export hubs is encouraged by incentives for the industry that has been at the forefront of exports for the country.

Rajiv Bhalla, MD, Barco India


The 2020 Budget has been drafted around the key themes of talent, technology, entrepreneurship and sustainability and we applaud the Centre’s efforts at boosting the economy. The Hon’ble Finance Minister has maintained focus on tourism by announcing that iconic destinations will be connected by “corporate” trains like Tejas and with the plan to develop 5 archaeological sites into iconic sites. Five new smart cities have also been proposed and Barco looks forward to partnering with the Government in this direction.

Ritesh Gandotra, Director, Xerox Business Services

If this budget had to be known for one thing, it would be the length and breadth of technology infusion across all aspects. Technology and data are changing the world and the latest Union Budget rightly makes these its mainstay. The focus on data, digital records, connectivity and data security across key citizen services underlines the government’s faith in technology to deliver better governance, a safer society and a more competitive economy. The proposals for building data centre parks and setting up the ambitious National Mission of Quantum Technology and Application are significant announcements to put the technology intent into practice.


Maninder Bharadwaj, Partner, Deloitte India 

The setting up of data centric parks in our own jurisdiction will encourage innovation, the ease of accessibility, creation of jobs and in gaining competitive advantage in the era of globalization. Ever since the launch of Digital India initiative by Hon'ble PM in the year 2015, technology based solutions are being rapidly adapted by businesses. The security aspects during this rapid technology transformation should be considered a vital component to protect the digital universe from cyber threats which eventually could compromise the envisaged growth. Cyber everywhere, grow anywhere.’

Sunil Jose, Senior VP and Country Leader, Salesforce India


We're pleased to see Artificial Intelligence adoption emphasised in the budget by the government. At Salesforce we agree that there is a tremendous opportunity in India to reskill existing and develop new AI talent for jobs of the future. It's also equally important that as we develop new advances in AI and skill new workers, that we make sure the ethical use of AI is a part of this development process. Salesforce stands by its commitment to expand its presence in the country by investing continuously in the country's workforce. We feel that the Finance Minister’s announcement on creating programs with local bodies to provide opportunities for young engineers is a positive move.

Ravi Mahajan, Tax Partner, EY

The Finance Minister’s speech reflected the Government’s commitment to press the peddle on India’s digital transformation journey. Such public-private partnerships would spur innovation and bode well for the future of India’s technology sector. Had the sector’s demand for extension of tax holiday benefits and abolition of MAT for SEZ units been met, it would have indeed been the icing on the cake.”

Supria Dhanda, VP and Country Manager, Western Digital India

With the announcement of the Budget 2020, it is motivating to see the initiatives to further advance the technology sector. We look forward to collaborate with the Government and industry to fuel the vision for data-centric innovations. The government’s plan to enable the private sector to build data center parks across the country highlights the huge potential of data. Addressing the need for technology and stressing on the importance of AI, Analytics and IoT will enable the country to embrace the technological advancements required to succeed today. We are happy to see the Government’s efforts to drive a positive change and position India as a technology leader.

Abheek Barua, Chief Economist, HDFC Bank

The Budget provides credible numbers in terms of the fiscal math, recognising the revenue shortfall faced this year. It uses up the 50bps point leeway that the FRBM act provides for both this and the next year which is a welcome step.

The budget commits to increasing the expenditure by 13% in 2020-21 with increased allocations for education, health and certain schemes in the agricultural sector. That said, this expenditure increase, coupled with the income tax cuts, does not seem to suggest a large fiscal stimulus that the current slowdown perhaps warranted. Of course, the fiscal space to do that was limited to begin with. The Fiscal Responsibility and Budgetary Management Act restrains the FM from deviating by more than 0.5 per cent of GDP from a glide path for the deficit of 3.3 per cent for 2019-20 and 3 per cent for the next.

Those who are disappointed with the absence of more overtures to the financial sector either in the form of more recapitalization resources for stressed public sector banks or a fiscal commitment to buy out the pile of toxic assets that continue to impede fund flow might draw some comfort from a measure that government will offer support by guaranteeing securities floated.

While we need to await the fine-print on how this will work and how quickly this will be implemented, this move might be helping in easing the logjam in the financial to some degree. Government guarantees could help cash-strapped NBFC borrow at lower rates. It could also enable the central bank to offer cash in exchange for these securities if it were to plump for some out of the box measures to attenuate risk aversion in the markets.

On a different note, the tax breaks offered to foreign investors and specifically those like sovereign wealth funds who are willing to place a long term bet on the economy acknowledge the fact that there is a fundamental mismatch between the supply of domestic savings and capital needs for accelerated growth. This along with the abolishment of DTT tax is likely to help attract foreign fund flows.

For the bond market, the borrowing numbers seem to be broadly in line with market expectations and are unlikely to put significant pressure on yields in the short-term.

Ms Savitha Kuttan, CEO, Omnicuris

The finance minister's decision to increase the budgetary allocation for education and upskilling in the medical sector was a long-expected and welcome move. At present, the doctor-patient ratio is 1:1445 against the WHO recommended 1:1000 and the nurse-patient ratio is 1:483 against the ideal 1:4. In accordance with the intention to foster more public-private partnerships, the government has already allowed medical colleges to be set up and managed as a joint venture between companies and trusts. Although the National Medical Commission was established to address the skill gap in the health sector, we expect more clarity from the government on its plan to increase graduate and postgraduate seats in medical education. To ensure that the central funds are put to quick use, the government must also ease the rules and regulations to help set up more medical institutes, which will help produce more healthcare professionals and fill the gap.

In line with its intention to increase public spending on health to 2.5 percent of the GDP by 2025, the government has increased the fund allocation for the health sector to 69,000 crores and announced its plans to expand its flagship Ayushman Bharat Scheme to set up more hospitals in tier 2 and tier 3 cities. The plan to set up these hospitals via public private partnerships under the support of the viability Gap Funding Scheme of 2004 is a positive move. the VGF scheme has benefited regional airport developments and metro rail projects across the country, and there is no reason it will not work in the health sector if the stakeholders play their cards right.

The private sector has long been looking for incentives to increase health investment in underserved areas, and this move is clearly an invitation from the government seeking their involvement. The decision to use the taxes levied on medical equipment to boost the health infrastructure in tier 2 and tier 3 cities is also a sustainable move as it will increase healthcare accessibility, and in turn boost the sale of medical devices. If these measures are followed up with tax breaks for private players looking to invest in underserved areas and government help in land procurement, it will make a world of difference to people without access to quality healthcare.

Nevil Patel, MD, Orpat Group

The Union Budget 2020 is out and there are some useful propositions of new schemes to generate and boost employment in the country. Make In India is the need of the hour and import of cheap Chinese goods in India has brought downturn in the economy.

The Government's move to increase customs duty on 300 items and the proposition of a new scheme for promoting the manufacturing of electronic item in the country are the steps in right direction. These schemes will not only invigorate the 'Make In India' move of Government by generating employment opportunities but will also help India dream bigger. Nevertheless, we are of the view that more items should have been included in the customs duty list which would cover almost all the sectors in order to increase the revenue of the domestic industries considerably."

Ms. Meghna Suryakumar, Founder and CEO, Crediwatch

The focus on enabling growth for MSMEs in today's Union Budget is encouraging. Enabling NBFCs to extend invoice financing to MSMEs through TReDS, should enhance opportunity to fuel the Indian economy and widen the acceptability and trust by the BFSI sector. The extension of GEM e-marketplace as a unified procurement channel should bring more vendors (from the current 3.2 lac) onto the platform. Additionally, amendments to Factor Regulation Act 2011 should boost the MSME sector. On the Debt Recovery side for lenders, the allowance to smallers NBFCs to approach the DRT for smaller ticket size loans, would be beneficial in lowering NPAs & improving the asset quality.

However, we expected to hear more clarity on the scheme to provide subordinate debt to be provided by banks for entrepreneurs of MSMEs since less than 15 % of the 50+ million Indian Small businesses have access to formal credit and there is a debt financing gap of the SME is over $1 Trillion.By allowing data centre parks in the country, the government has set a positive sentiment for the industry.

While this will allow better infrastructure in storing and dissemination of data, we were expecting the government to touch upon incentives for setting up data centres which will allow Fintechs to scale faster at an economical cost. This coupled with the extension of Bharat Net (FTH) to 1 lac gram panchayats would add a significant boost to the Digital push in the country.Given that several steps have been taken in the past to drive the Corporate Bond market in India, the increase of FPI limits from 9% to 15% is a positive push to increase international participation in high quality borrowers via the debt route. This coupled with easy access to credit from banks & NBFCs should bring down credit costs in the medium term.

For start-ups, considering the fact that in the initial years, one may not have adequate profit to avail this deduction, extension to avail the claim of deduction from the 7 years to 10 years is a breather. Deferral of tax on ESOP plans for start-ups should also help bring quality corporate talent to this industry.

Archit Gupta, Founder and CEO, Cleartax

Complex tax regime for taxpayers with the slabs rejig. With the optional new regime, taxpayers will have to evaluate what works better. Those committed to long term saving and investing via 80C may be discouraged and this may likely demotivate taxpayers from tax-saving linked investing. DDT removal is good as it increases dividend received in the hands of the taxpayer - however, such receipts to now be taxable in their hands. Those above 20% tax slab - will now face more tax on their dividend income.

We welcome deferment of perquisite taxation - now taxation at the time of 'exercise' deferred to 5 years or till they leave the company or till they sell their shares - whichever is earlier. This will be a key plank for hiring quality resources. Raising turnover threshold for audit for businesses to Rs 5Cr is a welcome relief. Hopefully tax filing for such businesses will also be simplified. However, such businesses will have to be careful with keeping cash transactions under 5% and will need a technology based mechanism to track that.

Sandipan Mitra, Founder, Hungerbox,India

The Union Budget provides some important benefits for emerging entrepreneurs. With the corporate tax being slashed to 22%, companies can now have a little more room to breathe and benefit from the assistance in funding through the investment clearance cell that has been proposed. This budget has certainly addressed some challenges that were faced by budding start-ups and has made it easier for them to receive funding from investors.

Tim Nicolle, Founder, PrimaDollar

The Finance Minister’s announcements under Union Budget 2020 introducing new schemes will help the small players in the export sector in a big way. The new Nirvik scheme introduces high insurance cover for exporters at a reduced premium. Simplified processes for faster claim settlements will be beneficial for both the exporters and the general insurers.It will lead to providing high insurance cover, reduction in premium for small exporters and simplified procedures for claim settlements,this will encourage export finance. This will boost exports.

Coming to the MSMEs, the announcement for the subordinate debt for entrepreneurs is a big positive and will help the MSME sector benefit in a massive way. These seem to be sound measures that can stimulate profitable activities for players in the trade and finance sector.”

Saurabh Garg, Co-founder and CBO,

We, like the rest of India, welcome Budget 2020 with open arms. The budget is a mixed bag with it’s positives and misses. In a commendable move, Government has extended support to affordable housing. The Government has extended an additional INR 1.5 lakh tax benefit on interest paid on affordable housing loans by one year. The extension of one year of Tax holiday on profits of developers involved in affordable housing projects is a clear-cut indication of higher allocation of resources towards affordable housing. This focus on affordable segments comes as a win-win situation for both sellers and buyers.

The Government has also proposed measures to improve liquidity for NBFCs and HFCs. This would be a welcome move for the real estate sector which has been struggling with liquidity crisis.The boost to growth of infrastructure & transport are positive step to ease living in suburban parts of the cities. Announcement to create 5 new smart cities reinforce the Government’s mission to provide Housing for All by 2022."

However, tax exemptions on housing loan and interest payments have been removed. This will be negative for the real estate sector which is already undress stress. House rent deduction has also been taken away and will burden the tenants. We were also expecting the stamp duty to be reduced or subsumed partially in GST which has also not happened and is a significant expense for the buyer."

Rahul Sharma, MD India, LogMeIn

The Budget 2020 looks very promising. We are particularly enthused about the FM’s announcement of seamless delivery of digital services as part of the next wave of digital revolution. AI, ML, Analytics, IoT, Robotics are making giant inroads in India, as was observed in the budget. The policy being introduced to build data centre parks throughout the country will help enhance the digital infrastructure to a significant extent. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike.”

Aakrit Vaish, CEO, Haptik

As digitization and advanced technologies continue to gain momentum, we welcome the Budget 2020 announcements. Once again, the Finance Minister’s emphasis on machine learning, robotics, AI and IoT will help boost India’s digital journey. A significant proportion from the allocation of INR 3000cr for skill development should focus on these cutting-edge technologies. We are also delighted to witness proposals such as the linking of 100,000 Gram Panchayats through the enhancement of Bharat Net and setting up of data centre parks across the country. As national systems become more sophisticated and our workforce is equipped with the relevant skills, we will truly see the next wave of digital revolution, with greater scope for large-scale indigenous innovation.”

Suganthi Shivkumar, MD, ASEAN, India & Korea, Qlik

We appreciate the government’s decision in the 2020 Budget to dedicate the necessary funds and resources towards developing revolutionary and breakthrough technologies such as ML, robotics and AI to further the skills that will prepare us for the next wave and accelerate India’s journey towards becoming a digital giant. With data equated as the new oil, the government’s plan of building cutting-edge data parks across the country is equally important. Furthermore, the governments initiative of allocating Rs 6000 crores to enable unabridged digital connectivity in over 100,000 Gram Panchayats through the Fiber to Home BharatNet scheme holds brilliant potential in securing India’s passage towards achieving tech-empowerment for the remote sector.”

Rakesh Kharwal, MD, India/South Asia & ASEAN, Cyberbit

The government has highlighted the role of digital technologies like analytics, IoT, AI, and quantum technology during this Budget Session. The burgeoning digital infrastructure of India needs a strong cybersecurity framework to support it. Now, since it has allocated Rs. 99,300 crores to the education sector and Rs. 3,000 crores for skill development itself, a good way to realize India's digital vision could be by working on the cybersecurity front from the very beginning. The government may want to cover its tech initiatives with avant-garde simulation-based cybersecurity training platforms like Cyber Range for proposed cyber forensic university and Skill India campaign. This will help India in generating millions of jobs for the youth and also strengthening national security”

Akash Gupta, Founder and CEO - Zypp (Earlier known as Mobycy)

The Union Budget 2020 paints an affirmative picture for the future. We are glad that the Finance Minister has emphasised on improving the air quality, citing that the matter of clean air is a matter of concern in large cities that have a population of over 1 million. To the same end, we believe that EV-powered everyday commuting solutions offered by Zypp through Electric Scooters and Logistics solutions will play a crucial role in times to come. The budget announcement further comprises positive news for India’s fast-growing start-ups.

The proposal to set-up investment clearance cell for entrepreneurs along with assistance in funding would definitely prove to be extremely beneficial. Furthermore, increasing the threshold of start-ups eligible for tax deduction from an annual turnover of 25Cr to now up to 100Cr is another welcomed move. The FM has also increased the window for such start-ups to claim a tax deduction for 3 years out of 10 years now as compared to 7 years previously. Owing to the same, the start-ups will find it easier to take risks and not be burdened financially while pursuing trailblazing innovations. Deferring ESOPs for start-up employees is another affirmative move, giving employees of start-ups to postpone taxation for 5 years or whenever they exit the venture, whichever is earlier.”

Ms. Ambika Sharma, MD and Founder at Pulp Strategy

The latest budget announcement for the year 2020 -21 bears vast potential in shaping India’s road towards achieving its target of emerging as a 5 trillion dollar economy. With India currently posed as the fifth largest economy in the world, I am particularly enthralled by the government’s decision to optimize new-age disruptive technologies such as Machine Learning, robotics and Artificial Intelligence (AI) towards attaining a seamless and integrated service sector. Further advancing the digital revolution in the country is the government’s resolution of developing state-of-the-art data centers across the nation.

Moreover, the FM’s proposal to allocate Rs 6000 crore for connecting 100,000 Gram Panchayats by FY21 will also prove instrumental in accelerating India’s journey towards becoming a tech –enabled nation. Also admirable is the government’s successful implementation of the Beti Bachao and Beti Padhao scheme which was reflected by the high gross enrollment of girls in all levels of school education. With the budget modeled towards realizing a progressive and equal women-centric society, the Finance minister also highlighted the fact that presently more than 6 lakh Anganwadi workers are equipped to upload status of more than 10 crore households. The government’s decision to provide Rs 35,600 crore for nutrition related programs and Rs 28,600 crores for women – linked programmes will vastly help in furthering women empowerment and gender equality."

Abhishek Kumar, Regional Director, Onvu Tech

This year's budget includes a number of positive reforms for the surveillance and security agency. The government has announced the launch of Police Academy and Forensic Sciences, 5 more smart cities, 9,000 KMs of economic corridor, enhancement of tourist attractions, and improved business landscape for MSMEs alongside others. Security and Surveillance infrastructure is a core element of all of these reforms and will give a strong stimulus to the segment."

The government has announced a number of measures for the education sector with a whopping Rs. 99,300 crore budget. With it, courses will go online soon and Top-100 NIRF Ranked Institutes start offering them. The government has also announced positive reforms including Asian-African 'Study in India' program, establishment of Police Academy and Forensic Science, and integration of medical institutes with dist. hospitals. Rs. 3000 crores have further been allocated for Skill Development. Perhaps, all of these reforms will go a long way by including video-analytics-based EdTech solutions to them as well."

Sanjay Katkar, JMD and CTO, Quick Heal Technologies

For cyber forensics University - One major step announced by the FM involved the proposal for establishing a national forensic university and cyber forensic university. With cyber crimes increasing at a rapid rate, the need for cyber forensics has become more important than ever for a rapidly digitising country like India. The setting up of a cyber forensics university is a welcome move from the Government. This will definitely help in improving India’s expertise to solve complex cyber crimes.

Priya Mahajan, Head of APAC Public Policy & Regulatory Counsel, Verzion Enterprise Solutions

The Union Budget 2020, is encouraging , forward looking and would ensure the necessary boost to the Digital India Vision. The Budget duly recognises the transformational impact of emerging technologies such as AI, IOT, Big data, Cybersecurity, ML and Robotics on the economy. The digital growth momentum is steered further and India definitely has a key role to play in the global economy and future of technology and innovation. We believe that India has a unique success story and a step towards being a global technology leader. This budget definitely favours new age digital economy and we look forward to further growth in the sector.

Prasanna Sarambale, CEO, Sterling & Wilson, Data Centre Business

The Union Budget 2020, is extremely encouraging and would ensure the necessary boost to the economy. For the first time Data centres have been given due importance. As technology leads the next level of growth for the country, the government’s move to focus on building the necessary back end infrastructure (via construction of new Data centre parks through the country) will ensure the GDP gets the necessary shot in the arm that the country is looking forward too.

The impetus planned by the government will ensure long term sustainable growth not only for the sector but also the country. Development of smart cities will need smart data centres, which is a huge opportunity for the sector, this move will also ensure jobs creation and boost to local consumption. This will act as a catalyst in the development of individual states.