Union Budget 2024: Anticipating India's Technological Leap

India, as the world’s third-largest economy, stands on the edge of a significant moment while awaiting the Union Budget 2024-2025. The expectations for the upcoming budgets are high and the nation is eagerly waiting to witness some transformative measures that will fortify the nation’s global standing. The industry is optimistic and emphasizes policies that will ultimately shape India’s economic trajectory and global competitiveness.

Information and Technology sector

As the anticipation for the budget is building, the technology industry is underscoring the crucial role of digital infrastructure, identity, and security in India’s endeavor to become a global technology hub. Industry has been stressing the need for policy support and funding in these areas to unlock India’s potential in technology and talent.

"As the Union Budget 2024 approaches, we look forward to the government continuing its focus on initiatives promoting cybersecurity, data privacy, and responsible AI development. Steps like the Data Protection Data Privacy (DPDP) Bill to strengthen data privacy and initiate new laws around deep fakes are highly appreciated.

We hope to see sustained investments in cybersecurity infrastructure and human capital development. With cyber threats only increasing each year, educating Indian businesses and government entities about the risks as well as providing them with access to modern cybersecurity solutions and highly skilled security professionals is paramount for the Indian economy. We hope to see the budget fund more educational and training programs to build expertise in the responsible use of AI and cybersecurity spaces.

Despite rising cyberattacks, organizations struggle with skills gaps and resource crunches so increasing the number of skilled professionals is important. Also, through the right education initiatives, Indian businesses should be aware of and consider using modern managed detection and response solutions to ensure they have 24/7 cyber protection without the need for additional security staff.

Further, there are still businesses in India settling for what they consider “good enough” cybersecurity so it’s important to provide education about what cybersecurity solutions protect against modern cyber threats. The ‘good enough’ approach to security that too many companies have settled for does not work in our industry. Organizations need the best outcomes, which is stopping the breach and consolidating point solutions to drive down costs.

Achieving these outcomes requires a true security platform, natively built with AI at the core together with human expertise to protect their critical assets from the endpoint and beyond.

Overall, a focus on these critical areas in the upcoming budget will pay dividends by creating a safe and innovation-friendly digital ecosystem. India has the potential to become a global hub for technology and talent. The right security approaches, policy support, and funding for these key areas will help unleash this potential,” said Nitin Varma, Managing Director, India & SAARC, CrowdStrike.

Finance Sector

Within the finance sector, the expectations revolve around the measures that can enhance financial inclusion, bolster digital transactions, and fortify the overall stability of the banking and financial ecosystem. The industry has been emphasizing the importance of regulatory support to expedite the adoption of advanced technologies like blockchain and artificial intelligence in banking operations.

Speaking on the ‘expectations or recommendations for the Interim Budget 2024 Anuj Arora, Co-founder & COO, of SahiBandhu Gold Loans said, “We anticipate the Interim Budget 2024 to align with the government's mission of uplifting the underprivileged and urge the government to introduce beneficiary schemes, especially as the General Sabha election approaches, focusing on the socio-economic empowerment of the marginalized. Acknowledging the FinTech and tech-based gold loan industry's pivotal role in reshaping financial services, we hope for policies supporting our growth, particularly in Tier 2, 3, and 4 cities, aiming to integrate rural communities into the formal banking system. Incentivizing FinTech to empower SMEs through financial and technical interventions would mark a significant stride. Addressing loan disbursement including loans against gold/jewelry, we recommend regulations fostering collaboration between traditional banks and digital lenders for accessible loans."

Manufacturing Industry

Stakeholders of this industry envision a strategic reduction in the corporate tax rate to facilitate manufacturing facilities, which will reduce startup costs and enhance price competitiveness. Although, the government seems to working towards this sector, an urge to scale the existing Product Linked Incentive (PLI) scheme.  Despite the efforts made by the government, companies are yet to be fully benefitted from these incentive programs. It is anticipated that the expansion of PLI will contribute to the growth of the manufacturing sector. It will attract businesses to introduce cutting-edge technologies, thereby enhancing overall productivity and quality.

The Production Linked Incentive (PLI) scheme launched with an outlay of INR 1.97 lakh Crores across 14 key sectors, is aimed to stimulate domestic manufacturing and employment creation. As of June 2023, 733 applications were approved with an expected investment of INR 3.65 lakh Crores.

However, as of March 2023, only 2900 crore has been disbursed out of Rs. 3,400 crore claims received under the scheme. The program is expected to contribute 1.7% to India’s GDP by 2027. Thus, while the PLI scheme has made some progress its full impact will be realized over the upcoming years.

“The proficient and agile handling of fiscal policy issues in the last few years, amidst global volatility and significant geopolitical risks, has successfully shielded the Indian economy from major headwinds. As a result, India has emerged as the fifth largest and the fastest growing major economy globally. The emphasis given to the manufacturing sector through schemes such as PLI and significant focus on both physical and digital infrastructure along with other measures including efforts to improve the ease of doing business has attracted a large inflow of investments. Notably, the automotive sector also saw an upswing.

Looking ahead, policy stability and continued emphasis on spurring investment and infrastructure development will not only further enhance the country’s global competitiveness but also lead to the growth of the manufacturing and service sector, improve supply chain efficiencies, and generate higher employment thereby leading to social gains. We remain confident that the Government will continue its push towards shifting the economy and transportation sector to a greener future that is less dependent on fossil fuels and includes cleaner energy options that are best suited for our country’s requirements at scale and in the fastest possible manner. This includes policy support for various technologies that utilize natural and indigenous energy sources such as solar, wind energy, biofuels like ethanol, and biogas that will help in the creation of economic wealth within the country thereby minimizing our import dependency and arresting economic vulnerability.

Additionally, the education and skilling sectors that capitalize on the country’s demographic dividend also need continued support through sufficient allocations that are aligned with the rapidly evolving technological changes. Implementing hi-tech skilling programs that extend beyond geographical boundaries to reach rural markets will be pivotal in addressing the shortage of skilled manpower and ensuring the production of globally competitive products and services,” attributed to Swapnesh R Maru, Deputy Managing Director – Corporate Planning, Finance & Administration and Manufacturing, Toyota Kirloskar Motors.

Conclusion

As India moves towards a digitally enabled future the considerations outlined by industry are positioned to play a crucial role in shaping India’s digital destiny. The anticipations attached to budget 2024 reflect the nation’s eagerness to embrace transformative measures and build a technologically advanced, economically robust, and globally competitive tomorrow.

 India expects to move towards a digitally enabled future with the Union Budget 2024-2025. The industry expectations depict a vivid picture of the nation’s aspirations for a technology-driven future. These collective anticipations underscore not only the urgency for strategic policy measures. The awaited budget is expected to be a catalyst for propelling India into an era of technological advancement, economic resilience, and international prominence.