Posted on

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

Posted on

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]

Posted on

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.