The government has released the interim budget for 2024. As per the budget document, the government has pegged non-tax revenue collection estimates from the communications sector at about Rs 1.2 trillion for 2024-25 and expects to exceed the budget estimates for the current fiscal. The government has revised the revenue estimate from other communication services for the current fiscal to Rs 935.41 billion from the earlier projection of Rs 894.69 billion mentioned in the previous budget. The revenue collections for 2024-25 are seen at Rs 1.20 trillion.
The interim budget proposes setting up a Rs 1 trillion corpus to fund technological research, with interest-free loans for 50 years. The fund would offer long-term financing to encourage research and innovation in sunrise domains of technology.
Under the budget, the government has increased the outlay on semiconductors and display manufacturing under the Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem by 130 per cent to Rs 69.03 billion. The total production linked incentive (PLI) scheme allocation under the Ministry of Electronics and Information Technology (MeitY) has also been raised by 33 per cent to Rs 62 billion, covering a variety of schemes in the electronic system design and manufacturing (ESDM) segment. Further, Rs 42.03 billion has been earmarked for incentives for assembly, test, and packaging plants. Specifically, Rs 15 billion is designated for semiconductor fab or electronic chip plants, Rs 9 billion for the Mohali-based semiconductor laboratory, and Rs 2 billion for the design-linked incentive scheme. For mobile PLI, the government has proposed to increase the allocation to Rs 61.25 billion in 2024-25, up from Rs 44.89 billion in the previous year.
The government has increased capital infusion in Bharat Sanchar Nigam Limited (BSNL) to Rs 829.16 billion in the budget. The capital infusion in the 2023-24 period was Rs 529.37 billion.
Further, the government has nearly doubled the allocation for cybersecurity projects from Rs 4 billion in 2023-24 to Rs 7.59 billion in 2024-25 under the interim budget. However, the capital outlay for the Centre for Development of Telematics (C-DOT) has been reduced to Rs 5 billion from Rs 5.9 billion in the previous year.
Industry reactions:
Commenting on the budget, Lt. Gen. AK Bhatt, Director General, Indian Space Association, said, “We commend the government’s allocation of the Rs 1 trillion corpus in the interim budget 2024 for long-term financing of technological research. This move will be beneficial for start-ups in the rapidly expanding space sector, providing them with support to innovate and conduct further research across various domains of space technology. Additionally, the new scheme being launched for boosting deep tech for the defence sector will be transformative. This initiative holds significant promise for DefSpace startups, which can play a substantial role in enhancing the ecosystem due to the integral relationship between space and defence industries. However, we are sanguine that the post-election full budget will include support for a liberal foreign direct investment (FDI) policy for space, inclusion of space grade components in PLI, reduction of goods and services tax (GST) for satellites, launch vehicles and ground equipment manufacturing and provide tax holidays and lower import duty for space sector firms.”
Meanwhile, Bimal Khandelwal, chief financial officer, STT GDC India, said, “The Union Budget 2024-25 presents encouraging prospects for the technology and digital infrastructure sector. The substantial increase in FDI inflow and the commitment to negotiating bilateral investment treaties signal a favourable environment for sustained foreign investment, aligning with the digital aspirations of the nation. The noteworthy outlay of Rs 11.11 trillion for infrastructure development, with a focus on technology, is a promising move. This budget holds the potential to positively impact the data centre industry, fostering innovation and growth. The emphasis on technology, innovation, and infrastructure aligns seamlessly with the evolving needs of the data centre sector, and we anticipate contributing significantly to India’s digital journey.”
Further, Sudhir Kunder, chief business officer, DE-CIX India, said, “Budget 2024 is a testament to India’s commitment to technological advancement and digital entrepreneurship. I am thrilled to see the emphasis on tax incentives for data centre investments and the recognition of the pivotal role they play in our digital economy. In fact, under the hyperscale data centre scheme, the government is targeting an investment of Rs 3 trillion in the next five years. This is a significant move that will undoubtedly spur growth in the tech sector. This budget makes it clear: this will be the year for the tech-savvy generation. The opportunities are immense and robust, paving the way for India to expand globally. With India emerging as the third largest ecosystem for start-ups globally with over 116,679 recognised ventures across the country, the focus on innovation and entrepreneurship is not just encouraging, but it also provides a solid foundation for the future. We are on the brink of a digital revolution, and I am excited to see where this journey takes us. With the government’s dedicated push to boost R&D within the country, and the allocation of Rs 80 billion to set up data centres and IT parks over the next five years, we are set to witness a surge in technological innovation and digital entrepreneurship.”
