The Union Budget Marks a Continuation of Government Efforts to Handhold Startups

The year 2021 will be remembered as a milestone for the presentation of the first paperless budget. It reinforces the significance of digitization and emerging technologies as among the formidable undercurrents in the Indian economy. These developments have shaped the trajectory of the startup ecosystem in the past few years.

Dr. Omkar Rai, DG – Software Technology Parks of India

The role of the government has further propelled the growth of startups. The Indian startup ecosystem is currently the third-largest in the world. A series of measures such as revising the definition of startups, providing income exemptions and setting up ‘Fund of Funds‘ has had a cascading effect by promoting entrepreneurship, generating employment and fostering innovation. Amid the focus on Aatma Nirbhar Bharat, the government has allocated INR 945 crores for Startup India Seed Fund Scheme in 2020.

It is notable that despite COVID-19, the startup ecosystem has taken rapid strides towards growth. There are a total of 38 unicorns, out of which 12 have emerged in 2020 alone. The Union Budget goes a step ahead in bolstering these efforts.

“The Union Budget marks a continuation of government efforts to handhold startups until they reach maturity. The extension of the tax holiday till March 31, 2022, will boost sentiment aid towards the paradigm shift from ‘job seekers to job creators‘. The allocation of Rs. 50,000 crores to National Research Foundation for five years will further boost the startup ecosystem to innovate and create cutting-edge technology products for all sections of society,” said Dr. Omkar Rai, Director General, Software Technology Parks of India.

“Riding on the wave of infrastructural developments and push by respective state governments, the Tier 2 and 3 cities will emerge as the next frontiers. Incentivizing the emergence of One Person Companies (OPCs) by no restriction of paid-up capital and allowing the conversion into any type of company will further provide an impetus to entrepreneurship, especially in Tier 2 and 3 towns,” Dr. Omkar Rai added.

The budget also stresses emerging technologies such as AI, ML-driven MCA 3.0 version, AI and an e-court system as a framework for the MSME ecosystem. Furthermore, the establishment of National Language Translation Mission will facilitate accessibility and ensure that the benefit of government initiatives percolate to the last mile.

Overall, the Union Budget is a futuristic document that prioritizes growth. Though much will depend upon the actual implementation of policies, the Union Budget has made a great start to propel the Indian startup ecosystem.

Dr. Omkar Rai further shared that, “The Budget takes cognizance of the significance of infrastructure in the shaping of economic trajectory and prioritizes its growth. The large-scale infrastructure projects such as the Delhi Mumbai Industrial Corridor and Dedicated Freight Corridor will create an enabling framework for the growth of startups.”

Dr. Omkar Rai is the Director-General, Software Technology Parks of India (STPI) under the Ministry of Electronics and Information Technology, Government of India. Under his leadership, STPI has been instrumental in boosting software exports and catalyzing entrepreneurship from the country. Dr. Rai has contributed immensely in re-positioning STPI with a focus on innovation and dispersal of the IT/ESDM industry beyond metros. He has spearheaded the growth of the IT industry in India and has been involved in various policy formulations from time to time. 

Dr. Omkar Rai has been closely working very closely with all stakeholders, including the government and IT industry and has played a key role in formulating an appropriate interface among Industry, Academia and the IT/ESDM Industry. Before joining STPI, he served the National Informatics Centre (NIC) in various capacities. As Development Commissioner, Special Economic Zone, Dr. Omkar Rai spearheaded the establishment of the first-of-its-kind centre for the development of a software technology park in Varanasi. Dr. Omkar Rai set-up Centre for Research and Industrial Staff Performance (CRISP) to provide practical training for skilled professionals to bridge the gap between industry requirement and skill set availability. Dr. Omkar Rai closely worked with the government to implement the National IT Policy 2012.