Budget 2022 is one of those special budgets that place importance on new technologies and create provisions for their growth.
This year’s budget is focused on technology and its development, with an emphasis on digitisation.
It indicates the government’s leaning towards and dependency over start-ups in terms of investments and tech-evolution to help India target economic growth.
This pro-technology aspect of the budget seems to focus on future and emerging tech. Through this, India can build its economy by investing in emerging start-up power.
On the tech side of the budget, star of the show is drones. This importance over drones have continued full steam ever since the encouraging turnaround since last year when the new civil aviation minister Jyotiraditya Scindia took charge.
He took full ownership of this sector and came up with a proactive and forward-looking drone regulation regime. The announcement of Drone Shakti reinforces this emerging industry.
It also encourages the start-ups to facilitate Drone Shakti through varied applications and for the drone-as-a-service model. That will push Indian start-ups to innovate, scale and build it in international standards.
Another aspect that was under the spotlight was AgriTech start-ups. A dedicated fund is set up in the budget, which will bring in a much-needed innovation boost to the agriculture sector.
Another area of focus is future mobility tech. This is also a space where many Indian start-ups are making headway. The budget also mentions encouragements to set up battery stations with a mass-level battery swapping policy.
These steps will help to promote mass adoption of Electric Vehicles and bring efficiencies in the EV space.
Another field that was under focus is animation, visual effects, gaming, and comics (AVGC). The budget announced building the capacity in this field and encourages new-age technology to develop around this field.
This will trigger the start-ups in this field to grow and create products for global consumers. It is equally important to create a task force to bring regulatory clarity in coordination with other states.
This is necessary as few states have banned it despite multiple positive court rulings.
The budget considered cryptocurrency and NFTs as virtual digital assets, which gives much-needed direction and regulatory clarity around such an investment class. But the tax prescribed seems to be on the higher side considering.
There are also various limitations on it like, no set-off or carrying forward of built-in losses. In this case, clarity is needed on how to treat those who hold such assets as stock in trade or exchanges.
Also, the cost of acquisition needs to be worked out more clearly to ensure all related costs enable the transaction. Higher taxes will deter potential investors.
But the budget has addressed the issue faced by the start-ups which are TDS clauses like 194O and 206C. New TDS clauses also require clarification.
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