Building Tomorrow: Assessing the Priorities in India’s Interim Budget 2024-25

Building Tomorrow: Assessing the Priorities in India’s Interim Budget 2024-25On February 1, 2024, the finance minister of India, Nirmala Sitharaman, presented the interim budget for 2024-25. The aim of this budget is to create a “golden era” for the tech-savvy youth of the country by following the principles of growth for all. In addition to its focus on innovation, investments, and trade, the budget also aims to promote sustainability and environmental responsibility through its support for the green technology sector. Furthermore, the Interim Budget 2024-25 recognises the importance of startups and SMEs in driving economic growth and job creation and includes measures to support these sectors, including tax incentives, access to finance, and other forms of assistance. The overall goal of the budget is to create a conducive environment for entrepreneurship and small business development, which will help spur economic growth and boost more sustainable innovation in the country.

Vision of Budget 2024-25

The guiding principle of this year’s budget plan is “Viksit Bharat by 2047”, i.e. “Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential”. The focus has been directed towards the implementation of next-generation reforms, with an emphasis on building consensus with states and relevant stakeholders. The budget emphasises strengthening green technology sectors and allocating funds for research and development initiatives to promote innovation. To achieve the goal of “Net-Zero” by 2070, the government has proposed various initiatives and schemes in the electric vehicle (EV), solar energy, and clean energy sectors.

Electric Vehicle Sector

The Electric Vehicle (EV) sector in India has experienced significant growth in recent years, propelled by a combination of government initiatives, technological advancements, and shifting consumer preferences. Policies promoting sustainable transportation, subsidies, and incentives for EV manufacturing and adoption have played a pivotal role. Additionally, the establishment of charging infrastructure and collaborations with global players have further fuelled the growth of the EV sector, positioning India on the path toward a cleaner and more sustainable automotive future. To bolster the EV sector, the government has planned to provide support for manufacturing and charging infrastructure. Furthermore, a payment security mechanism will encourage the adoption of e-buses for public transportation networks.

Rooftop Solarisation

The finance minister also announced a central government-backed project for rooftop solarisation. This initiative is expected to cover 1 crore households and will provide up to 300 units of free electricity every month. Households are expected to save a significant amount of money, ranging from INR 15,000 to INR 18,000 annually.

Green Energy

The government has proposed various initiatives to enhance the country’s energy sector. One such initiative is to provide viability gap funding for the development of offshore wind energy, with an initial capacity of one gigawatt. In addition, the government aims to set up a coal gasification and liquefaction capacity of 100 metric tons by 2030. This project will aid in reducing the country’s reliance on imported natural gas, methanol, and ammonia.

Another key initiative is the phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transportation and piped natural gas (PNG) for domestic purposes. This policy will be enforced, and financial assistance will be provided for the procurement of biomass aggregation machinery to support the collection of these resources.

The adoption of a dependable biomass collection system is expected to significantly improve the supply chain of plants that are reliant on seasonal biomass availability. This can be achieved by implementing a systematic approach towards biomass collection, which can lead to better planning, coordination, and management. The implementation of such a system is expected to benefit businesses and investors by enabling faster decision-making and reducing uncertainties related to the availability of biomass. Furthermore, a robust supply chain will ensure a steady and consistent supply of biomass, which can have a positive impact on the overall productivity, efficiency, and profitability of the plants. Additionally, it can help to reduce waste, enhance sustainability, and promote environmental conservation.

Bio-Manufacturing and Bio-Foundry

The government is set to launch a new scheme aimed at promoting green growth by establishing bio-manufacturing and bio-foundry facilities. This scheme will be designed to provide environmentally friendly alternatives, including biodegradable polymers, bio-plastics, bio-pharmaceuticals, and bio-agri-inputs. The initiative aims to transform the current consumptive manufacturing paradigm to one based on regenerative principles, which will ensure more sustainable practices in the long run.

Deep-Tech Technologies

Furthermore, the government is introducing a new scheme to strengthen deep-tech technologies for defence purposes and accelerate “atmanirbharta” (self-reliance). The interim budget also proposes a corpus of INR 1 lakh crore to provide a fifty-year interest-free loan, which will significantly encourage the private sector to scale up research and innovation in sunrise domains. The corpus will provide a long-term financing or refinancing mechanism with extended tenors and low to nil rates of interest, offering companies an avenue to invest in research and development while minimising the burden of financial obligations. By leveraging this funding mechanism, more companies will be able to focus on innovation and growth without worrying about the implications of high costs of capital.

Budget for the Intellectual Property Landscape

India has witnessed notable growth in the Intellectual Property Rights (IPR) sector, reflecting a heightened emphasis on innovation and creativity. The recent boost in the number of patent filings and the increasing awareness about the significance of protecting intellectual assets have immensely contributed towards more IP holders recognising and enforcing their rights in India. Efforts to streamline patent and trademark registration processes, coupled with policy reforms, have made it more conducive for businesses and individuals to secure their intellectual property. This burgeoning IPR sector signifies a positive shift towards fostering innovation, attracting investments, and aligning with global standards in intellectual property protection. Towards the Intellectual Property sector in India, a total budget of INR 318.02 crores has been allocated, with INR 279.18 crores towards the Office of the Controller General of Patents, Designs and Trademarks; INR 20.84 Crores towards the IPR Policy Management; INR 18 crores towards the infrastructure development in the offices of CGPDTM.

Make in India Initiative

The “Make in India” initiative has been a flagship program launched by the Indian government to encourage domestic manufacturing, promote economic growth, and enhance job creation. The initiative envisions transforming India into a global manufacturing hub by fostering a favourable business environment, simplifying regulatory procedures, and attracting foreign investment. It focuses on key sectors such as electronics, automobiles, defence, textiles, and more, emphasising the importance of self-reliance and reducing dependency on imports. “Make in India” seeks to propel India’s industrial landscape, boost innovation, and contribute to the nation’s economic development. Towards the initiative that comprises schemes such as the Scheme for Investment Promotion, Fund of Funds for Startup Scheme, Credit Guarantee Fund, Startup India, Startup India Seed Fund Scheme (SISFS), Ease of Doing Business and the Production Linked Incentive Scheme (PLI) for White Goods (ACs and LED Lights), the government has allocated INR 1963.03 crores.

Digital India Initiative

The Digital India Program is a comprehensive initiative by the Indian government aimed at transforming the country into a digitally empowered society and knowledge economy. Launched with the vision of leveraging technology to enhance governance, promote inclusivity, and foster economic growth, the program encompasses various pillars such as broadband connectivity, e-governance, digital literacy, and electronic manufacturing. Through the deployment of digital infrastructure and services, the initiative seeks to bridge the digital divide, empower citizens, and propel India towards a more technologically advanced future. INR 4215.01 crores have been allocated towards the Digital India Program, which would utilised towards strengthening electronic governance, manpower development, Promotion of Electronics and IT HW Manufacturing  (MSIPS, EDF and Manufacturing Clusters), PLI for Large Scale Electronics and IT Hardware, Promotion of IT/ITeS Industries, Cyber Security Projects, R and D in IT/Electronics/CCBT, Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA), Promotion of Digital payment and the Capacity Building and Skill Development Scheme.

Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem

The Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India was designed to further the vision of Aatmanirbhar Bharat and position India as the global hub for ESDM. It constitutes a strategic endeavour to fortify the nation’s prowess in semiconductor and display manufacturing. Through meticulous research and development initiatives, targeted investments, and the cultivation of a conducive industrial ecosystem, the program endeavours to position India as a self-reliant force in cutting-edge technologies. This not only bolsters economic growth but also positions the country as a key player in global technological innovation. For the Modified Programme, the government has set aside INR 6903 crores of corpus, which would be utilised towards the Modified Scheme for setting up of Compound Semiconductors/Silicon Photonics/Sensors Fab/Discrete Semiconductors Fab and Semiconductor Assembly, Testing, Marking and Packaging (ATMP)/Outsourced Semiconductor Assembly and Test (OSAT) facilities in India, Modified Scheme for Setting up of Semiconductor Fabs in India, Modified Scheme for setting up of Display Fabs in India, Modernisation of Semiconductor Laboratory, Mohali and Design Linked Incentive Scheme.

Infrastructure Outlay

The government has announced a budget allocation of INR 11.11 lakh crore for infrastructure outlay, which equals an increase of 11.1 per cent from the budget allocation for capital expenditure in the previous financial year. The focus is on key areas such as infrastructure, housing, employment generation, health, tourism, agriculture and production-linked incentive schemes (PLI). This emphasis on continued spending on infrastructure by the Finance Ministry will encourage private spending and boost the Indian economy, leading to an overall increase in innovation, research and development.

In Conclusion

The present focus of the Indian Government has been heavily on creating a conducive environment for startups and small businesses. The government’s commitment to supporting such initiatives will further provide a nurturing environment for newer technologies to emerge and for businesses to leverage more intellectual property rights opportunities in the green innovation sector. Overall, the Indian government’s interim budget for the year 2024-25 reflects a commitment to cultivating innovation, embracing technology, and supporting the green technology sector in the country.

The increased focus towards green energy projects signals a significant step towards a greener, more sustainable future, which aligns India as a responsible player in the global sustainable innovation landscape. In conclusion, the Indian Government’s interim budget for 2024-25 reflects a forward-thinking approach that intertwines green technologies, innovation, trade facilitation, and digital inclusivity. As India embarks on this transformative journey, the integration of this budget with existing schemes will fortify the nation’s commitment to becoming a global leader in the realms of technology, innovation, and economic resilience.

Authors: Manisha Singh and Shivi Gupta

First Published By: Lexology Here