Photo credit: Wikimedia.
We live in an era of screaming headlines. Social media noise around us ensures that we remain addicted to what is explicit and provocative. Not that which is implied. So we could well be forgiven for assuming that the 2017 India budget did not have anything special in it for the tech or startup industry per se.
But smart entrepreneurs learn to read between the lines. They spot the unstated trend and capitalize on it before everyone else does. In that sense, this budget had a lot to say to tech entrepreneurs who were listening closely.
This government believes tech is the vehicle that can transform India.
What was implicit in the finance minister’s budget speech is that this government believes tech is the vehicle that can transform India. Every single statement had a flavor of how digitization, mobility, and automation would change the status quo for the better. The focus on “JAM” (Jandhan-Aadhaar-Mobile) was clear. (Jandhan is a financial inclusion scheme that lets people open bank accounts even with zero balance, and Aadhaar provides a unique digital ID to every citizen.)
What’s in it for tech entrepreneurs
By now, the government’s desire to encourage e-payment systems is well known, but what also came across was the desire to automate government processes and to reach out to the “last mile” audience, particularly in rural areas. The desire to energize youth and improve governance through the use of technology was stated upfront and the theme repeated itself in every section of the speech.
The “Swayam” platform for virtual learning and certification, the focus on the unified payments interface (UPI) and Bhim app, the announcement of Aadhaar payment schemes linked to 2 million swipe machines, app and web-based automation of defence travel booking and defence pension schemes, geo-tagging of rural employment scheme assets through Bhuvan, the broad initiative to provide high-speed data connectivity to 1,50,000 villages, the “Digi Gaon” project to provide telemedicine, education and skills through digital technology in rural areas … the theme is “tech” all the way!
The time has come to coin the catchphrase – “tech for social change.”
What does this mean for techpreneurs across the world? It means that one of the largest populations in the world is getting ready to embrace and invest into tech infrastructure in a focused and sustained manner, supported by their government. Anecdotal evidence points to the fact that if smart proposals are put in front of the right bureaucrats, things could move very fast. On the other hand, it is still possible to get lost in the slow labyrinths of legacy government organizations. Part of the success will lie in knowing how to access the people who can make things happen quickly.
There was also an interesting announcement of increase in the block period during which startups can avail of their three-year tax holidays. Eligible startups can now avail of this within a block of seven years rather than five, giving a longer runway to carry forward losses, start becoming profitable, and then availing of the tax holiday. The condition of continuous holding of 51% voting rights by promoters has also been relaxed subject to them continuing to hold stake, making it far more practical than before.
Photo credit: Flickr user Ajith Kumar.
Good news for big tech players, too
The government is also willing to professionalize and be accountable, as can be seen from the stated intent to publicly list organizations like IRCTC (Indian railway’s e-ticketing system), which have been trendsetters in digitizing public services. This is good news for the larger tech players as well, who have found it difficult to deal with the government in the past. It is worth noting that in the domestic market, the government has been one of the largest spenders on IT for almost a decade, with its IT spend estimated to touch US$7 billion this year.
Faced with a world where outsourcing is under severe pressure from automation and rising protectionism, the tech industry is bound to look towards the domestic market for at least short-term support. And getting engaged with the various government projects on the anvil may be one strategy that could work for large tech firms and not just the startup ecosystem.
There was some talk of making India an electronics manufacturing hub, but specifics were missing. What we do know is that allocation towards the sector has been raised significantly to over US$100 million and over 250 investment proposals worth almost US$20 billion have apparently been received by the government over the last two years.
See: One more step to ease digital payments in India – a new regulatory board
Interestingly, India also seems to be upping the ante on cyber warfare and cyber readiness with the announcement of a separate “Computer Emergency Response Team” to be set up and financial allocations being made for the same. Cyber security is an area of increasing focus and investment across the world. In the emerging world order, India doesn’t want to be left behind. One can foresee rising investments into this space.
So what does all this mean? I would say it clearly means that “India is open for tech business.” Even more now than ever before! And it is open to the world, not just to local businesses.
But is it also time to coin the catchphrase “tech for social change” and drive it as a focused, industry-wide initiative in India? I would hazard that this government will be very supportive of any such initiative and industry may have much to gain from it as well. Both financially, as well as in social capital and goodwill. Perhaps the time has come.
- This is an opinion piece.
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