1. INTRODUCTION

As India celebrates Azadi ka Amrit Mahotsav and marches closer towards its centenary year from independence, the central government is making its best efforts to ensure that no stone remains unturned as it hopes to deliver on the India@100 roadmap that the Economic Advisory Council to the Prime Minister had issued in August 2022, which set out the objective of making India a high income country by 2047. The Finance Minister of India, Ms. Nirmala Sitharaman presented what she called 'the first budget in Amrit Kaal' on February 01, 2023 ("Budget 2023"). While outlining her vision under the Budget 2023, she stressed on the focus being on seven priority actions, which would complement each other and serve as 'Saptarishi', to guide India in achieving the visions set out for Amrit Kaal. They are:

  • Priority 1: Boosting inclusive development;
  • Priority 2: Reaching the last mile;
  • Priority 3: Encouraging infrastructure and investment;
  • Priority 4: Unleashing the potential;
  • Priority 5: Promoting green growth;
  • Priority 6: Enhancing the youth power; and
  • Priority 7: Focusing on the financial sector.

As is evident above, a lot of the focus is on growth and development by enhancing youth, unleashing potential, and boosting inclusiveness, infrastructure, and investment with a focus on the financial sector, all of which bode well for the tech industry. A reading of the Budget 2023 validates that 'technology' is meant to play a key role in achieving the visions set out in Amrit Kaal. Measures announced in the past few Union Budgets have served as a catalyst for the introduction of several key initiatives that have changed the landscape of technology in India. Some key measures announced in the past include the introduction of the Central Bank Digital Currency (also called 'Digital Rupee'), establishment of digital banking units, granting of infrastructure status to Data Centers, setting up a fintech hub at GIFT city and the allocation of INR 1,500 crores towards incentivizing and developing digital payments infrastructure in India. These and many more measures adopted by the government in the recent past have led to the innovative development and use of technologies that has stimulated inclusion amongst stakeholders in the market, provided better, faster, and secure service performance and delivery, and most importantly, led to ease of access to services and doing business in India. The technology developments coupled with sound regulatory reforms including but not limited to the Digital Lending Guidelines, amendments to the Information Technology Act and the Intermediary Guidelines and the release of the draft Digital Personal Data Protection bill indicate the strong intent of the government to move towards a digital India. The Budget 2023 proposes to further enhance the ongoing development in the technology space with the announcement of several key measures. In this article, we lay out our preliminary thoughts on some of the key announcements made in the technology space and decode the impact that these measures are likely to have on India Inc.

2. HIGHLIGHTS AND ANALYSIS

2.1. Agri-Tech:

(a) Digital Public Infrastructure for Agriculture:

Digital public infrastructure for agriculture is proposed to be set up, that will be built as an open source, open standard and inter operable public good that is meant to enable inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and insurance, help for crop estimation, market intelligence, and support for growth of Agri-Tech industry and start-ups.

(b) Agriculture Accelerator Fund:

An Agriculture Accelerator Fund will be set-up to encourage agri startups by young entrepreneurs in rural areas. The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability.

(c) Credit Increase:

The agriculture credit target is proposed to be increased to INR 20 lakh crore with focus on animal husbandry, dairy, and fisheries.

Analysis:

An Agriculture Accelerator Fund will be set-up to encourage agri startups by young entrepreneurs in rural areas. The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability.

The digital public infrastructure will allow farmers to access for free, all information that they may require to aid with crop planning and its health. The infrastructure that is proposed to be set up as an open source, will also enable farmers with improved access to credit and insurance and assist with marketing and sale of agriculture produce. This measure also ties in well with the Digital Agriculture Mission that was initiated by the government last year to assist and connect farmers with technology with a view to increase the farmers' income. It appears that the digital public infrastructure aims to achieve for Agri-Tech, what the Open Network for Digital Commerce ("ONDC") was introduced to achieve for technology and ecommerce. While ONDC is still being implemented across the country, the initial success shown by it is likely to give stakeholders in the Agri-Tech sector optimism that such digital public infrastructure set up, specifically with a focus of promoting open networks for exchange of goods that is farmer-centric, achieves the same level of success. The initiation of an accelerator fund will boost the growth of Agri-Tech in India as it will not only encourage entrepreneurs but will also strengthen the agriculture supply chain. Separately, the hike in credit will serve as a boost to all stakeholders in the agriculture market including Agri-Tech companies as such extended credit is likely to provide necessary financial aid to farmers to invest in technology.

2.2. Health-Tech:

(a) Medical Research Facilities:

Research facilities will be made available in selected Indian Council of Medical Research ("ICMR") Labs for research to be undertaken by public and private medical college faculty and private sector research and development teams as a step to encourage collaborative research and innovation.

(b) Pharmaceutical Innovations:

A new programme is proposed to be introduced through centres of excellence, to promote research and innovation in pharmaceuticals and to encourage industry to invest in research and development in specific priority areas.

(c) Multidisciplinary Courses For Medical Devices:

Introduction of dedicated multidisciplinary courses for medical devices in existing institutions to ensure availability of skilled manpower for futuristic medical technologies, high-end manufacturing, and research.

Analysis:

With respect to the healthcare sector, the Budget 2023 focusses on enhancing India's capabilities through increased skilled manpower, research and development and public private partnership in healthcare sector. The dedicated multidisciplinary courses for medical devices in existing institutions to ensure availability of skilled manpower for futuristic medical technologies and high-end medical devices will play a pivotal role in strengthening the healthcare sector as a whole. Additionally, extending ICMR labs to medical colleges and private sector research and development teams for research purposes, will lead to better research outcomes and offer innovative solutions. With the proliferation of medical schools, India will have adequate number of physicians as well as nursing staff and paramedics in future years. Having said that, the Budget 2023 fails to address inclusivity and mass availability of healthcare and medicine, which could have been introduced by bringing more clarity to existing regulations on e-pharmacies and enable more private and foreign investment in the sector, as well as in distribution and logistics in the healthcare and pharma sector. The industry had envisaged to move closer towards universal health coverage and a significant increase in budget expenditure towards healthcare which hasn't been delivered. That said, currently, the healthcare sector needs to abide by the Information Technology Act and rules made thereunder, and several other laws such as the Electronic Health Record Standards, 2016, Telemedicine Practice Guidelines, 2020, while the Draft Health Data Management Policy, 2022 is in the pipeline as well. Given the withdrawal of the proposed Digital Information Security in Healthcare Act ("DISHA") (which intended to provide for electronic health data privacy; confidentiality, security and standardization), the budget allocations and announcements can only boost the sector, once adequate clarity is brought into the current Indian data protection laws in relation to processing and treatment of digital health data, and accordingly, the need of the hour is robust laws to protect digital health data in India. Overall, the Budget 2023 can still be viewed as more of a positive than a negative for players in the HealthTech sector as better access to research facilities, introduction of programmes and multidisciplinary courses with a focus on ensuring availability of skilled manpower for futuristic medical technologies and high-end medical devices should give comfort to stakeholders in the sector.

2.3. Edu-Tech

(a) Skill India Digital Platform:

The Budget 2023 targets to upskill the youth and accordingly, proposes to introduce a digital ecosystem and launch a unified Skill India Digital Platform for (i) enabling demand-based formal skilling; (ii) linking with employers including MSMEs; and (iii) facilitating access to entrepreneurship schemes.

(b) National Data Governance Policy:

To unleash innovation and research by startups and academia, a National Data Governance Policy is also proposed to be framed, which intends to enable access to startups and academia, with anonymized data for research and development purposes.

(c) National Digital Library for Children and Adolescents:

It is also proposed to establish a National Digital Library to facilitate availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility for children and adolescents. Further, to inculcate financial literacy, financial sector regulators and organizations will now be encouraged to supply age-appropriate reading materials to such libraries.

(d) Capacity Building in Securities Market:

To build capacity of functionaries and professionals in the securities market, it is proposed that Securities Exchange Board of India ("SEBI") will be empowered to develop, regulate, maintain and enforce norms and standards for educational purpose in the National Institute of Securities Markets and recognize award of degrees, diplomas, and certificates in the given sector.

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