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A Budget that missed the opportunity for being bold on both Strategic Autonomy & Reform action

 iSPIRT Foundation, a technology think-and-do tank, believes India’s hard problems can be solved only by leveraging public technology for private innovation. iSPIRT, as a think-and-do-tank, pioneered the concept of Digital Public Infrastructure (DPI)

The Budget starts by acknowledging that India is facing “an external environment in which trade and multilateralism are imperilled and access to resources and supply chains are disrupted”. But the details aren’t in line with the idea. The Government also acknowledged AI and cutting-edge technologies as force multipliers for better governance. 

AI has been spoken about a few times at different places. However, there is no material proposal on AI, except as a tool for “Bharat-VISTAAR”—a multilingual AI tool in agriculture.

FM announced Manufacturing support to seven strategic and frontier sectors, including Bio-Pharma, Chemicals, Semiconductors, and Electronic Components. This will help the ecosystem build up in these sectors and, in a way, support the cause of “Product Nation” from a building capacity and infrastructure point of view. However, it does not address “strategic autonomy” and technological sovereignty as a thought process. 

The one that most closely links to “Aatmnirbhar Bharat” or strategic autonomy is the announcement on ISM 2.0, to produce equipment and materials, design full-stack Indian IP, and fortify supply chains, including skilling and training. Also, the mention of established dedicated Rare Earth Corridors is a welcome move to fill the gaps in the supply chain in these areas, given the geopolitical situations. 

Any Government announcement takes about 2 years to roll out in the field. The AI Mission, National Quantum Mission, Anusandhan National Research Fund, and Research and Development and Innovation Fund have been mentioned by the FM in speech. RDI is rolling out now. The government missed the bus to announce a “market access” scheme or a fund for the products developed after taking all the steps in R&D and frontier technology advancements. 

We have maintained that our Economic Policy will need to foreground Strategic Autonomy as a core pillar, which becomes all the more imperative in the current global geopolitical scenario. But Strategic Autonomy is not possible without technological sovereignty. While the government has taken steps to “reduce critical import dependencies,” at a time when “new technologies are transforming production systems”, incremental steps are not enough.

“A market access plan for Indian products designed and developed in India by resident Indian companies is the need of the hour for any fruitful outcome from R&D and product development. The Government must consider this with all seriousness in the future,” said Amit Agrahari, volunteer at iSPIRT Foundation.

Last year, Bharat Trade Net was announced as an integrated trading platform. This year’s announcement of “Customs Integrated System (CIS) as a single, integrated and scalable platform for all the customs processes and use of non-intrusive scanning with advanced imaging and AI technology for risk assessment, takes the thought to the next level.  This is very much in line with our National Regulatory Compliance Grid (NRCG) approach and use of advanced technology for data-driven governance. 

However, our proposal of building a NRCG for all regulatory systems is still waiting. “Unless we use a Grid approach for digital transformation and connect all regulators, it is going to be difficult to reduce the regulatory cholesterol”, said Sudhir Singh, an iSPIRT Volunteer looking after Ease of Doing Business, and Policy. 

Linking TreDS with the GeM portal is a welcome step towards unlocking true Digital potential in Ease of Doing Business for MSMEs. “This can further create a grid approach by connecting to the Open Credit Enablement Network (OCEN) and trade finances for SME exporters,” said Tanuvi Thakur, volunteer at iSPIRT Foundation. This will further aid EoDB through quicker and cheaper access to credit by MSMEs. 

The other major welcome step in this regard has been the in-principle movement from penalty and prosecution to fees. This has also been our core decriminalisation aim for achieving EoDB.

Overall, it’s a subdued Budget despite the challenging geopolitical environment rather than a bold Budget that speaks on both “strategic autonomy” and “reforms”.

About iSPIRT Foundation – We are a non-profit think-and-do tank that builds public goods for Indian product startups to thrive and grow. iSPIRT aims to do what DARPA or Stanford University did in Silicon Valley for startups. iSPIRT builds four types of public goods – technology building blocks (aka India Stack), startup-friendly policies, market access programs like M&A Connect, and Playbooks that codify scarce tacit knowledge for product entrepreneurs of India. For more, visit www.ispirt.in.

For further queries, please reach out via email:  [email protected], [email protected] 

Please note: The blog post is authored by our volunteers, Sudhir Singh, Tanuvi Thakur and Amit Agrahari

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A Budget with Good Intentions but lacks drive to realize Viksit Bharat & EODB

iSPIRT Foundation, a technology think-and-do tank, believes India’s hard problems can be solved only by leveraging public technology for private innovation. iSPIRT, as a think-and-do-tank, pioneered the concept of Digital Public Infrastructure (DPI)

Industry watched and waited to see if this budget will have bold, strategic announcements with long-term vision, aiming for Viksit Bharat 2047. Instead the budget has become more a tactical prescription for handling short-term economic correction.

Three themes capture our attention in the 2025 budget: The Investment in Innovation, Regulatory Reforms and MSME Credit.

Given our Product Nation initiative at iSPIRT, we were looking for bold steps in two major areas: Private sector R&D funding and Ease of Doing Business.

The funding for R&D made incremental progress in this budget. Under the theme ‘Investing in Innovation” the Finance Minister announced Rs. 20,000 Crore to be allocated from the policy announcement of 1 Lakh Crore made in previous budgets. There is no major decision or clarity on how this funding will be routed. In addition, intent is expressed to explore a Deep-Tech fund in the future.

Similarly two welcome announcements towards achieving strategic autonomy are, an outlay for 20,000 crore to develop Small Modular Reactors (SMR) and operationalise at least five indigenously developed SMRs by 2033 and, a National Geospatial Mission to develop foundational geospatial infrastructure and data.

There is a marked improvement in intent to solve the Ease of Doing Business (EoDB) problem in the budget made evident by yesterday’s Economic Survey.

We have been pursuing the Government of India (GOI) on EoDB to implement a comprehensive three-pronged approach, to bring India into the top 5 or 10 EoDB countries. This includes decriminalising 1200 provisions; rationalising multiple laws and implementing a National Regulatory Compliance grid at the center and then extending it to states. Our approach gels with the “Whole of Nation” thinking given by the Honorable Prime Minister.

The GOI appears to reflect this thinking in the statement, “A light-touch regulatory framework based on principles and trust will unleash productivity and employment. Through this framework, we will update regulations that were made under old laws. To develop this modern, flexible, people-friendly, and trust-based regulatory framework appropriate for the twenty-first century…”.

However, the specific action of forming a High-Level Committee for regulatory reforms that “will be set up for a review of all non-financial sector regulations, certifications, licenses, and permissions”, is welcome but appears to be incremental in nature and a slow-moving approach.

The Janvishwas 2.0 announcement has also been repeated stating 100 items to be taken up instead of 1200 reported by us.

Sudhir Singh, iSPIRT’s policy expert volunteer said, “The concept of digital transformation through National Regulatory Compliance Grid (NRCG) has been ignored in the budget. However, another idea of “Digital Port”, pursued by iSPIRT for more than two years now, on digital transformation of cross border trade has received attention and GoI seems to have framed it as ‘BharatTradeNet’ in the budget 2025.”

The budget speech states, “a digital public infrastructure, ‘BharatTradeNet’ (BTN) for international trade will be set-up as a unified platform for trade documentation and financing solutions”. This indeed is an important and welcome announcement.

The Finance Ministry’s move to separate R&D funding and Startup funding is encouraging. The startup-related announcements reflect the government’s continued support to startups.

The government has taken several steps to boost credit enablement for SME and Nano enterprises, a significant part of Priority Sector Lending. Some good announcements were made such as the Kisan Credit Card (KCC) limit increasing from INR 3 lakh to 5 lakh, which in three states – Karnataka, Maharashtra and Uttar Pradesh – is based on Open Credit Enablement Network (OCEN), an initiative of iSPIRT. Other welcome announcements include an increase in credit guarantee cover for MSMEs from INR 5 crores to 10 crores, introduction of customized credit cards for MSMEs, and capital infusion into select public sector banks.

A new Fund-of-Funds with a fresh contribution of another 10,000 crore has been announced. It is encouraging to see the time limit for u/s 80-IAC to avail income tax exemption benefit for startups has been extended by 5 years to 01.04.2030. Another announcement of interest for startups is an extension of credit credit availability with a guaranteed cover of INR 10 crores to 20 crores, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors important for Atmanirbhar Bharat.

iSPIRT cofounder Sharad Sharma said, “It is heartening to see private sector R&D funding rolling out with a 20,000 crore fund allocation. Formation of Ease of Doing Business (EoDB) committee is also welcome. However, there is a need to take big moves and expedite these steps to meet 2047 deadlines. BharatTradeNet is a welcome announcement and we hope there will be a thorough and transparent industry consultation on it. Overall we are missing bold and specific actions on Strategic Autonomy and Product Nation. “

About iSPIRT Foundation – We are a non-profit think-and-do tank that builds public goods for Indian product startups to thrive and grow. iSPIRT aims to do what DARPA or Stanford University did in Silicon Valley for startups. iSPIRT builds four types of public goods – technology building blocks (aka India Stack), startup-friendly policies, market access programs like M&A Connect, and Playbooks that codify scarce tacit knowledge for product entrepreneurs of India. For more, visit www.ispirt.in.

For further queries please reach out via email: [email protected] , [email protected] , or [email protected]

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Budget 2024 – Empowering Startups and MSMEs, and Doubling Down on DPIs and R&D

This 2024 Budget coming post-election has aroused the most curiosity since the budget of 2014. It is for two reasons that this 2024 Budget is significant as we work towards a Product Nation: Reason 1 is for this budget’s Innovation and related public spending on private innovation and Reason 2 is for the next-generation reforms to create a simpler regulatory environment. It is heartening to note that both items are priority areas.

The continuity of the interim budget announcement of 1 lakh crore for private R&D funding is encouraging enough for the startup ecosystem. Under the Vishvamitra initiative, iSPIRT has been pursuing funding at scale for private sector-led R&D and its commercialization. The announcements of funding research in highly sensitive strategic areas such as Small Modular Nuclear Reactors and setting up a 1000 crore venture capital fund for the Space economy have been on our list of initiatives to advocate for and it is heartening to see the Government address R&D investments in geopolitically sensitive areas. 

The Finance Minister announced, “We will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of 1 lakh crore.” What and how this mechanism will be set up will be critical for enabling R&D in the country to achieve Viksit Bharat 2047.

Among iSPIRT’s top  initiatives is the Stay-in-India checklist, and the request to remove the “Angel Tax” for all classes of investors. The removal of angel tax is the biggest highlight of this budget for the startup ecosystem. The announcement comes after decades of struggle and persuasion. Finally the government has recognised the role of startups in generating employment and has acted in a positive direction. 

There is a huge amount of work pending to reform Ease-of-Doing Business (EoDB) if India is to achieve the set objective of Viksit Bharat 2047. The Finance Minister stating an  intent to “formulate an Economic Policy Framework” to set the “scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth” perhaps speaks about the government’s thinking on it.  

The government’s intention to involve states in ease of doing business (EoDB) efforts is also a very welcome step. We hope the next moves are swift and the government seriously attempts to at least be in the top 10 EoDB destinations globally. This is much needed for MSMEs, Startups, and even to attract FDI in GCCs. The economic survey tabled yesterday also aligns with this thought process. 

“We have successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years” said the budget speech. Public investment in Digital Public Infrastructure (DPI) coupled with innovations by the private sector has been a well-accepted norm now. The Government is serious about using the DPI approach in multiple areas, from agriculture to education, etc. The increased penetration of DPI will eventually help digitalization and penetration of software products in the economy. 

The budget recognising MSME credit as one big area requiring attention has also called for several actions in this direction. One important step is involving PSU Banks to build their in-house capability to assess MSMEs for credit using an MSME’s digital footprint, instead of relying on external assessment. This will encourage banks to develop cash flow based lending on lines of another initiative of iSPIRT – the Open Credit Enablement Network (OCEN) that focuses on information based collateral lending rather than asset based collateral lending which in turn could help in developing a new credit assessment model that evaluates the digital footprints of MSMEs in the economy. 

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Interim Budget 2024 – DPI’s the new factor of productivity

This being an interim budget, much was not expected as far as new announcements and taxation changes. However, for iSPIRT and the Product ecosystem of the country, it is heartening to know that some of our initiatives and thoughts as a ‘think-tank’ have become central to thinking of Government at the leadership level. The following are important to note

The Finance Minister mentioned that “DPI (digital public infrastructure), a new factor of production in the 21st century, is instrumental in the formalization of the economy”. She also mentioned the G-20 successes. ISPIRT pioneered the concept of DPI and played a vital role in rolling out many DPIs and covering the DPI advocacy as a knowledge partner to the Digital Economy Working Group. 

The second announcement that can hugely impact product nation-building is the funding of Research. FM announced that, “A corpus of rupees one lakh crore will be established with a fifty-year interest-free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains.” Also, the thought of generating employment and empowering youth was central to this announcement. We hope that post-election a robust mechanism can be developed to implement this and capitalize on nation-building. This announcement is also important from iSPIRT’s thought process where a continuous push under its “Vishwamitra” initiative is being out on funding R&D in multiple ways at scale. 

Also notable is,  a new scheme for deep-tech technologies for defence aiming at expediting ‘Aatma-nirbharta’ is on the anvil. 

Although nothing new has been announced, Start-ups are central to the Government’s thinking for economic development. 

Overall it is a futuristic thinking budget speech with an emphasis on deep-tech, research funding, Capital inflows and startups along with capex and infrastructure. 

Though there was a mention of ‘Reform, Perform, and Transform’ as a guiding principle, the budget did not touch upon any specific reform or intent on Ease of Doing business. We wish this becomes an important agenda item along with funding research for our businesses to succeed in global competition. 

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iSPIRT’s response to Union Budget 2023

Budget 2023 – Digital Public Infrastructure (DPI) the ‘Mantra’ for New India

iSPIRT Foundation, a technology think-and-do tank, believes that India’s hard problems can be solved only by leveraging public technology for private innovation. iSPIRT as a think tank pioneered the Digital Public infrastructure (DPIs)

India is at the cusp of what could be the most exciting quarter century of its post-independence existence, referred to as ‘Amrit Kaal’ by the Economic Survey yesterday and today in the Budget speech. The Economic Survey also mentioned that GDP could be boosted by 1% by Digital Public Infrastructure (DPIs), where India is stealing a March on the world for sure. 

The second testimony to the important contribution of DPIs to the economy comes in the budget speech today when the finance minister stated, “India’s rising global profile is because of several accomplishments: unique world class digital public infrastructure, e.g., Aadhaar, Co-Win and UPI” in the forefront. 

Development of DPIs, Stay-in-India Checklist (for Ease of Doing business of Startups), and a ‘jugalbandi’ between public technology and private innovation, through techno-legal regulations, are central to iSPIRT’s work in an attempt to build Product Nation. 

The union budget 2023, brings in cheer to see attempts on the following:

  • Digital Public Infrastructure: The resolve to deepen the DPI and the belief in their role in economic growth. India Stack to build the DPIs has become central to the thought process. Taking the queue ahead the budget 2023 announced the development of DPI for Agriculture, which will be an open source, OpenAPI digital public good, to build inclusive farmer-centric solutions, credit & insurance, farm inputs market intelligence. An Agriculture Accelerator Fund has been announced to promote Agritech start-ups.
  1. Vigyan Infrastructure: efforts to boost R&D, though limited to some sectors right now. Notable among these are – It encourages private sector R&D teams for encouraging collaborative research and innovation in select ICMR labs in the PPP model
  2. One hundred labs for developing applications using 5G services will be set up in engineering institutions. 
  3. Center of Excellence for AI for “Make AI in India and Make AI work for India
  • MSMEs funding & growth is part of the budget thought process, which may lead to the use of another DPI called Open Credit Enablement Networks (OCEN) for enabling MSME funding.
  • The importance of Ease of doing business is reflected in some announcements like using PAN as a Common digital identifier and entity DigiLocker for MSMEs.
  • Wanting to keep the startup revolution going is reflected in the intent to use Startups to build technology in multiple sectors and also use the policy for a new India.

However, beneath all the euphoria, some chronic issues remained to be addressed. The disappointment is on the Stay-in-India checklist (a list of Ease of doing business issues for Startups) to stop startups from slipping from India, which has not been addressed. The checklist is being continuously pursued by iSPIRT and is much needed to provide a competitive edge for India to refrain startups from leaving her jurisdiction.  

Overall it’s heartening to see the vision statement in budget, “Our vision for the Amrit Kaal includes technology-driven and knowledge-based economy”.   

About iSPIRT Foundation – We are a non-profit think-and-do tank that builds public goods for Indian product startups to thrive and grow. iSPIRT aims to do for Indian startups what DARPA or Stanford did in Silicon Valley. iSPIRT builds four types of public goods – technology building blocks (aka India stack), startup-friendly policies, market access programs like M&A Connect and Playbooks that codify scarce tacit knowledge for product entrepreneurs of India.

For more, visit www.ispirt.in.For further queries, reach out to Email:  [email protected] or [email protected].

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iSPIRT Foundation’s Response to Union Budget 2022

Union Budget 2022 – Imprints of using Digital public infra with Private innovation

iSPIRT Foundation, a technology think-and-do tank, believes that India’s hard problems can be solved only by leveraging public technology for private innovation through open APIs. 

This “innovation architecture” is now going mainstream. The Union Budget 2022 mentions five efforts that iSPIRT has been intimately involved in:

  • India Stack – Promoting digital economy & fintech, technology-enabled development, energy transition, and climate action.
  • Health Stack – An open platform for the National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
  • Digital Sky – Use of ‘Kisan Drones’ will be promoted for crop assessment, digitisation of land records, spraying of insecticides and nutrients.
  • Digi-Yatra & Logistics Stack – Multimodal Movement of Goods and People. The data exchange among all mode operators will be brought on the Unified Logistics Interface Platform (ULIP), designed for Application Programming Interface (API). 
  • DESH (Digital Ecosystem for Skilling and Livelihood) Stack – This aims to empower citizens to skill, re-skill or upskill through online training. It will also provide API-based trusted skill credentials, payment and discovery layers to find relevant jobs and entrepreneurial opportunities. 

This embrace of the new innovation architecture is a seminal moment for our economy and society. However, more could have been done.

Some low-hanging opportunities missed are:

  1. A few positive announcements have been made for the funding ecosystem for Indian startups (such as capping the surcharge on long term capital gains and an expert committee to suggest measures to boost venture capital and private equity investment in startups). While these are in line with iSPIRT’s ‘Stay-in-India’ checklist effort, immediate actions on some of these (as well as other) issues in the checklist will help further. 
  2. Ease of Doing Business is mentioned in the Budget speech, but no specific actions are announced. 
  3. 5G is a big opportunity. India can leverage this to become a telecom equipment provider in Radio Access Network (RAN). iSPIRT’s SARANG effort is focused on this. There should have been specific capital allocations and Design Linked Incentives (DLI) for OpenRAN as a strategic area in Mission mode.

Overall, the Budget is well-balanced and ushers in new thinking about innovation in emerging sectors that are strategic to the country.

Sharad Sharma, Co-founder & Volunteer – “In the coming years, India needs to usher in a product economy in Defence, Electronics, BioPharma, ClimateTech (including EVs), FinTech, HealthTech and Software. This Budget sets the stage for this new innings by having a focus on sunrise industries.” 

Sudhir Singh, Fellow – Policy Initiatives – “Since the announcement of National Policy on Software Product (NPSP), no Budget has been able to consider making it active and announce measures, e.g. Digital Product Development fund could help bolster “Digital India” and other strategic measures could help galvanise a Software product Industry of India.” 

Sanjay Khan Nagra, Member – Donor Council & Volunteer – “Some of the measures announced by the FM for startups (tax parity for unlisted and listed securities, extension of concessional tax regime for startups and manufacturing startups, setting-up a committee for encouraging VC/PE investments in startups, etc) and digital assets/blockchain ecosystem are commendable and in line with long-standing industry demands. We hope the momentum continues with the pragmatic implementation of these policy measures and further regulatory actions building on top of these measures.”

About iSPIRT Foundation – We are a non-profit think-and-do tank that builds public goods for Indian product startups to thrive and grow. iSPIRT aims to do for Indian startups what DARPA or Stanford did in Silicon Valley.

iSPIRT builds four types of public goods – technology building blocks (aka India stack), startup-friendly policies, market access programs like M&A Connect and Playbooks that codify scarce tacit knowledge for product entrepreneurs of India. For more visit: www.ispirt.in

For further queries, reach out to Sudhir Singh (+91) 96505 76567, Email us:  [email protected] or [email protected]