Government Breaks new ground with corpus of Rs one lakh crore corpus for frontier research and sunshine industries besides giving a boost to middle class with affordable loans for buying homes of their own and promoting green technologies
From TN Ashok
The BJP led NDA government led by Prime Minister Narendra Modi broke new ground by tuning itself with global trends announcing investments in three different sectors – creation of Rs one lakh crore corpus for frontier research in technology and sunshine industries, allocations for the middle class living in rented homes to buy their own, and solar panels for over one crore households with a rider of 300 units of free electricity.
All three reflect the global trends : As most countries of the world led by the US are investing heavily in billions in making super-duper semiconductors the size of a human hair that can work 25,000 times faster and store as much information in a chip to power Artificial Intelligence that can revolutionise health care, legal aid, government functioning, and several other frontiers benefitting people. Companies such as Alphabet, Tesla, Apple, Nvidia, Microsoft, …. Often called the FAANG or Magnificent 7 are pouring billions and their stocks are booming in the global markets.
India, like these companies, hopes to devote research to develop super chips in Artificial Intelligence on its own instead of depending on China which the companies in the US are making concerted efforts to break.
While detractors may call it a “ election budget “, the Finance Minister Nirmala Sitharaman budget does a lot for enterprising entrepreneurs for investments in sunshine industries making available funds for 50 years without interest. “For our tech savvy youth, this will be a golden era.”, she said while obviously referring to research and development of new technologies of semiconductors and AI generated tools.
The government has announced Rs 1 lakh crore corpus to bolster research and innovation. The corpus worth Rs 1 lakh crore will be established with a fifty-year interest free loan.
The Modi government’s focus towards technology is clearly evidenced by government efforts since 2014 . From initiatives such as Digital India to Digital Public Infrastructure, India is evolving as a digital economy. And during today’s Budget Speech, Finance Minister Nirmala Sitharaman said, “For our tech savvy youth, this will be a golden era.”
Industry leaders from the FICCI and CII virtually gave a 10 out of 10 for Modi’s budget as they said the Finance Minister was on the right track focusing on the crucial role played by Digital Public Infrastructure in fostering inclusive development centered around the people. There has been a substantial increase in budget allocation for Research and Development (R&D) in IT/Electronics, Cybersecurity, and e-Governance, marking a positive stride towards realizing the vision of Digital India.
Over Rs 1500 Crore have been earmarked in the budget for the third phase of e-court development, a move expected to revolutionize the delivery of justice, making it more efficient and accessible to the common man,” says Devroop Dhar, Co-Founder & MD, Primus Partners.
With this announcement, the government has announced a corpus of Rs 1 lakh crore that will be established with a fifty-year interest free loan. This corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. “This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” added Nirmala Sitharaman.
In addition, a new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’. The corpus is being looked upon as a measure that will empower private sectors to lead innovation. Eswara Rao Nandam, Founding President of Polymatech Electronics says, “the Finance Minister’s visionary approach in allocating a substantial ₹1 lakh crore for long-term interest-free loans aimed at fostering innovation. As a semiconductor chip manufacturer, we acknowledge the pivotal role of innovation in our industry.”
Other highlights of the budget: Ms Sitharaman said a white paper would be placed on the table of parliament shortly describing steps taken by the Modi government towards fiscal consolidation, public expenditure, and stepped up investments on infrastructure.
The government hopes to achieve a GDP growth rate of 7.3% in fiscal 2025-26, and rein in the Fiscal Deficit (the difference between government borrowing and government expenditure) at 4.8% of the GDP by FY 25/26 from the current 5.8% or so.
Capital expenditure is projected at over Rs 1,11,111, 111 crore which would be a substantial part of the GDP and 11.12 step up from previous outlays.
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