After Pran Prathistha of Shri Ram at Ayodhya, every Bhartiya is experiencing following :
होहिं सगुन सुभ बिबिधि बिधि बाजहिं गगन निसान।
भावार्थ:- अनेक प्रकार के शुभ शकुन हो रहे हैं, आकाश में नगाड़े बज रहे हैं।
This budget comes as a “शुभ शकुन” for start-ups and entrepreneurs.
In Jan 2022, Organiser highlighted that “Bharat needs to increase its R&D spend to 2.4 per cent of GDP and focus on innovation-driven solutions that may account for almost 40 per cent of the $10 Trillion Indian economy envisaged by 2034”. In the 2024 Budget, the Indian Finance Minister announced an R&D corpus of Rs 1 lakh crore with a 50-year interest-free loan.
Corporate Social Responsibility (CSR) to Corporate Innovation Responsibility (CIR)
The corpus will support long-term financing or refinancing with a long span at low or nil interest rates. This will cheer the private sector to increase research and innovation in sunrise domains. It will motivate Entrepreneurs and problem solvers who want to work in deep tech, which takes longer to build the product or solution. Also, This R&D corpus will boost the India Semiconductor Mission (ISM).
Further FM stated, “A new scheme will be launched to strengthen deeptech for the defence sector”. In 2023, the Indian government issued a draft national deep tech startup policy suggesting changes across nine themes, including access to funding, boosting the intellectual property regime, sustaining deep tech startups, and enabling shared infrastructure and resource sharing.
According to FDI Markets, In 2022, India experienced a 400 per cent increase in estimated capital expenditure in R&D ($12.9bn) in 2022, from $2.5bn in 2021. Bharat ousted the US, the number one for the past decade, as the top R&D FDI destination.
According to a 2022 Deloitte survey of 99 companies globally, Bharat remains the destination for multinationals’ engineering, research, and development operations. Approximately 85 per cent of the surveyed MNCs already have an Indian Global Capability Centre (GCC) for engineering and R&D. Additionally, more than 70 per cent of the surveyed MNCs that already use GCC for such activities planned to increase their engineering and R&D spend.
This Budget is Bharat’s decisive step towards a structural alteration directed by innovation and investment in Research and Development to achieve long-term sustainable and inclusive growth to match the R&D spend of the US and China, i.e. 3.4 per cent and 2.6 per cent of their GDP, respectively.
Ashvamedha of Indian startups to go global.
During her speech, FM Sitharaman said, “Priority to ensure timely, adequate financial help to MSME”. She said that training will be provided to Micro, Small and Medium Enterprises to compete globally.
Over 20 per cent of Indian start-ups have gone international, mainly in consumer services. New start-ups now focus on the North American market, the UAE, and the UK to do business and recruit high-powered talent. Expanding business to countries with a steady political climate, conducive socio-economic and immigration policies, simple tax and regulatory requirements, and high mobile and broadband penetration is now within reach for Indian startups. It can provide them with a global customer base.
Research states that 40 per cent of Indian start-ups with seed funding rounds between $500,000 and $5 million in 2022 create solutions for global markets. Most are creating software across categories. But we’re observing more internationally focused consumer brands and B2B commerce companies. The new wave of AI startups will speed up this trend. Over 50 per cent of new startups launched in India will likely be global from day one.
Upbeat Stock Market- Bharat become fourth-largest stock market.
Bharat overtook Hong Kong to become the fourth-largest stock market. On Jan 22 2024, the combined value of shares listed on Indian exchanges reached $4.33 trillion, versus $4.29 trillion for Hong Kong. The rally in the Indian stock market came from a rapidly growing retail investor base, sustained inflows from foreign institutional investors (FII), strong corporate earnings and robust domestic macroeconomic fundamentals.
Moreover, Bloomberg reported that India has placed itself as an alternative to China, attracting fresh capital from global investors and companies alike, thanks to its steady political setup and a consumption-driven economy that remains among the fastest-growing of significant nations. Professor Heiwai Tang – Director of Asia Global Institute- HKU, said, “Investors reallocate their capital in response to the changing geopolitical landscape. American investors, especially fund managers, are under pressure to divest their investments from the Hong Kong equity market. Countries currently in good relationship with the US, like India and Japan, will naturally benefit from increased US capital inflows during divestment. I remain optimistic that Hong Kong is an international financial centre.”
Further, after the Finance Minister’s budget speech, the Global Investor community is also keen to engage with Bharat. Baybars Altuntas- Chairman of the World Business Angels Investment Forum (WBAF), said, “The potential of the Indian start-up ecosystem is immense, yet it requires increased access to foreign funds and markets for further growth.
Numerous international angel investors express interest in participating in the Indian start-up landscape. To facilitate this, the Indian government and the stock market must establish a conducive and transparent process for global investors. Collaborating with organisations like WBAF can be instrumental in assisting the Indian government to engage effectively with the global angel investor community.”
To ensure continuity and provide a seamless transition, the finance minister proposed an extension of the expiration date of Start-up tax benefits to March 31, 2025.
The finance minister said that the decision to extend these tax benefits reflects the government’s dedication to fostering an environment conducive to entrepreneurship, investments, and the growth of IFSC units.
Furthermore, to build 100 companies with $1 billion in revenue, the Indian government should reserve at least 10 per cent of projects for domestic start-ups. Like Members of Parliament Local Area Development Scheme (MPLADS), Members of Parliament Local Startup Development Scheme (MPLSDS)should be created. MPLSDS should further be replicated till the Panchayat level. Indian financial institutions, including stock exchanges, should convince global investors to invest in the Indian start-up ecosystem. For example, Bharat’s National Stock Exchange (NSE) should partner with the London Stock Exchange (LSE) to communicate the “Viksit Bharat @2047” vision to them and invite them to invest in Bharat.
To go global, Indian start-ups need a Global Ambassador. Our Prime Minister Modi is the most recognised and influential Global leader and Brand in all surveys. Thus, PM Modi must be the global ambassador for Indian start-ups. In PM’s every international engagement motto, “Jai Anusandhan” must be incorporated.
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