Union Budget 2019: Ambitious plans for fintech, startups and innovation research

"We will increase our efforts to improve the skills of our youth in newer areas such as artificial intelligence, big data, robotics, etc., valued highly within and outside the country to ensure they can secure high paying jobs both in India and abroad," said FM Nirmala Sitharaman during her budget speech. 

announcement.jpg

Presenting her first budget as the Finance Minister of India, Nirmala Sitharaman made some ambitious announcements to foster growth in the technology and innovation space. 

From training youth on new-age technologies to easing angel tax-related complications, the 2019 Union Budget has signaled that the India government is serious to push the country on the forefront of innovation and related investments. The innovation boost according to the Finance Minister is necessary to make India a USD 5 trillion economy within a few years. 

Focus on technology skills and research 

The government plans on providing skill training to 10 million people in digital technologies like AI, IoT and big data, which the Finance Minister says will help address the serious skills shortage in the IT sector. This will also boost innovation in industries which are lagging behind such as agriculture. 

"We will increase our efforts to improve the skills of our youth in newer areas such as artificial intelligence, big data, robotics, etc., valued highly within and outside the country to ensure they can secure high paying jobs both in India and abroad," FM Nirmala Sitharaman said. 

HIGHLIGHTS FOR TECH SECTOR

Training for 10 million youth in digital skills

Boost to National Research Foundation

Boost to digital payments and fintech

Setting up of payments platform for MSMEs

Setting up of E-verification for Angel Tax collection

Setting up of Electronic Fundraising Platform for businesses in social sector

The government has set up substantial funds for the National Research Foundation (NRF) in order to advance new innovation research. This is a clear sign that the GoI is finally taking technology research seriously, having lagged far behind nations like US and China in terms of locally filed patents. 

Akin to the US National Science Foundation, India's NRF will work closely with universities and premier educational institutions to bring innovation research to the forefront. 

Boost to fintech in India 

During her budget speech, FM Sitharaman announced that the budget is a friendly one for financial technologies. As a part of it, fostering digital payments is at the center of fintech promotion. 

According to Finance Minister, BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be utilized to advance the cashless economy. Businesses with yearly turnover of Rs 50 crore should utilize the digital methods of making financial transactions, which the FM said will be made available with merchant discounts and without charges. RBI and banks will absorb such discounts, said FM. 

To promote digital payments and disincentivize payments in cash, the budget has proposed a TDS of 2 percent on cash withdrawal surpassing Rs 1 crore in a year from a bank account. 

Pertaining to digital payments, a payments platform for MSMEs will also be set up. According to the finance minister, the platform will bring micro, small and medium enterprises (MSMEs) under the formal economy. This will be part of the government’s initiative to help MSMEs survive and thrive in the highly competitive digital space. 

Easing startup and angel tax regulations 

Bringing her focus to boost startup growth in the country, the Finance Minister said startups and investors who file requisite declarations will not be subjected to any kind of scrutiny. The FM also announced that a system of e-verification will be set up and so the money raised by new companies will not require any further tax scrutiny. 

This is a certainly a startup-friendly move when it comes to determining angel tax. Complications related to angel tax have been a bottleneck for years and friendly regulation to promote investments in the startup space is a positive sign for the economy, believe experts. 

To boost awareness and promotion in the startup space, the budget has also set aside funds to start a TV channel under Doordarshan, which will be focused solely on startup culture and new innovations.

Helping entrepreneurs in agriculture and social welfare 

The budget has also proposed setting up Electronic Fundraising Platform, social exchange where entrepreneurs running social welfare companies and NGOs can raise capital for their endeavors, either in the form of equity or debt. The mechanism of the social exchange is still under SEBI review, the Finance Minister said. 

Apart from this, in the agro-rural sector, 80 livelihood business incubators and 20 technology business incubators will be set up in 2019-20 under ASPIRE scheme. Under this, the finance ministry plans on developing 75,000 skilled entrepreneurs in the agro-rural space. 
 

Union Budget 2019: Ambitious plans for fintech, startups and innovation research

"We will increase our efforts to improve the skills of our youth in newer areas such as artificial intelligence, big data, robotics, etc., valued highly within and outside the country to ensure they can secure high paying jobs both in India and abroad," said FM Nirmala Sitharaman during her budget speech. 

announcement.jpg

Presenting her first budget as the Finance Minister of India, Nirmala Sitharaman made some ambitious announcements to foster growth in the technology and innovation space. 

From training youth on new-age technologies to easing angel tax-related complications, the 2019 Union Budget has signaled that the India government is serious to push the country on the forefront of innovation and related investments. The innovation boost according to the Finance Minister is necessary to make India a USD 5 trillion economy within a few years. 

Focus on technology skills and research 

The government plans on providing skill training to 10 million people in digital technologies like AI, IoT and big data, which the Finance Minister says will help address the serious skills shortage in the IT sector. This will also boost innovation in industries which are lagging behind such as agriculture. 

"We will increase our efforts to improve the skills of our youth in newer areas such as artificial intelligence, big data, robotics, etc., valued highly within and outside the country to ensure they can secure high paying jobs both in India and abroad," FM Nirmala Sitharaman said. 

HIGHLIGHTS FOR TECH SECTOR

Training for 10 million youth in digital skills

Boost to National Research Foundation

Boost to digital payments and fintech

Setting up of payments platform for MSMEs

Setting up of E-verification for Angel Tax collection

Setting up of Electronic Fundraising Platform for businesses in social sector

The government has set up substantial funds for the National Research Foundation (NRF) in order to advance new innovation research. This is a clear sign that the GoI is finally taking technology research seriously, having lagged far behind nations like US and China in terms of locally filed patents. 

Akin to the US National Science Foundation, India's NRF will work closely with universities and premier educational institutions to bring innovation research to the forefront. 

Boost to fintech in India 

During her budget speech, FM Sitharaman announced that the budget is a friendly one for financial technologies. As a part of it, fostering digital payments is at the center of fintech promotion. 

According to Finance Minister, BHIM, UPI, Aadhaar Pay, NEFT, RTGS can be utilized to advance the cashless economy. Businesses with yearly turnover of Rs 50 crore should utilize the digital methods of making financial transactions, which the FM said will be made available with merchant discounts and without charges. RBI and banks will absorb such discounts, said FM. 

To promote digital payments and disincentivize payments in cash, the budget has proposed a TDS of 2 percent on cash withdrawal surpassing Rs 1 crore in a year from a bank account. 

Pertaining to digital payments, a payments platform for MSMEs will also be set up. According to the finance minister, the platform will bring micro, small and medium enterprises (MSMEs) under the formal economy. This will be part of the government’s initiative to help MSMEs survive and thrive in the highly competitive digital space. 

Easing startup and angel tax regulations 

Bringing her focus to boost startup growth in the country, the Finance Minister said startups and investors who file requisite declarations will not be subjected to any kind of scrutiny. The FM also announced that a system of e-verification will be set up and so the money raised by new companies will not require any further tax scrutiny. 

This is a certainly a startup-friendly move when it comes to determining angel tax. Complications related to angel tax have been a bottleneck for years and friendly regulation to promote investments in the startup space is a positive sign for the economy, believe experts. 

To boost awareness and promotion in the startup space, the budget has also set aside funds to start a TV channel under Doordarshan, which will be focused solely on startup culture and new innovations.

Helping entrepreneurs in agriculture and social welfare 

The budget has also proposed setting up Electronic Fundraising Platform, social exchange where entrepreneurs running social welfare companies and NGOs can raise capital for their endeavors, either in the form of equity or debt. The mechanism of the social exchange is still under SEBI review, the Finance Minister said. 

Apart from this, in the agro-rural sector, 80 livelihood business incubators and 20 technology business incubators will be set up in 2019-20 under ASPIRE scheme. Under this, the finance ministry plans on developing 75,000 skilled entrepreneurs in the agro-rural space.