DPI Dominates, AI Awaits: India's 2024 Budget charts digital course

This budget doubles down on three key aspects of our technology story: Our Startups, DPI and AI.

By Tanuj Bhojwani and Shreya Mandi 

Finance Minister Nirmala Sitharaman began her budget speech by pointing out that India retains a bright spot in an otherwise uncertain economic outlook for the globe. With a government committed to growth and a young, ambitious population, this seems to be a particularly promising moment for India.

One reason why India finds itself in this enviable position has been the bets we’ve taken in the past on our software and technology industries. This budget doubles down on three key aspects of our technology story: Our Startups, DPI and AI.

Angel Tax Abolished

Firstly, the removal of angel tax is a long-awaited, welcome move for startups and investors alike. We agree with the Finance Minister that this one stroke of the pen "will unleash innovation and attract more capital to fuel our nation's entrepreneurial spirit”. If we can recreate the buoyancy of Indian public markets in the private capital markets for startups we will see a massive unlocking of innovation, jobs and growth.

Boost to Digital Public Infrastructure

Secondly, the budget also doubles down on Digital Public Infrastructure (DPI). India's success with systems like UPI and DigiLocker has set a global benchmark, outpacing many advanced economies in digital service delivery. The budget allocates for expanding this philosophy of building digital infrastructure to new sectors, including agriculture. This commitment to DPI is crucial for India's continued digital transformation and economic growth.

The budget does specifically introduce a potentially game-changing reform: greater adoption of the Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands. This initiative promises to clarify land ownership, increase tax collections, and significantly reduce risks associated with property transactions. Clear land titling will unlock a new wave of capital. Today our banks are just as afraid to deal with a property whose records are unclear, as you and I are. The financing available from mortgaging land can energise our businesses and help people rise out of poverty.

AI Awaits its Turn 

However, while the budget shows a strong commitment to technology-driven growth, it falls short in providing clear directives for artificial intelligence (AI). The 52% increase in the budget for the Ministry of Electronics and Information Technology (MeitY) signals India's intention to invest heavily in future technologies.

This budget could’ve allocated a small amount specifically to AI Use case testing & adoption across government ministries. Even a small fund dedicated to this cause could encourage ministries to try out experiments, any number of which could’ve led to massive productivity gains. Perhaps this is an area the Finance Minister is reserving for future announcements or is expected to come out of the India AI Mission.

In conclusion, the 2024 budget demonstrates India's commitment to leveraging its digital advantages. The focus on DPI and support for startups are commendable steps towards a more digitally empowered India. However, as we move forward, a more comprehensive strategy for AI adoption across government & business sectors will be crucial to fully realise India's potential as a global technology leader.

Tanuj Bhojwani and Shreya Mandi work at people+ai, a not-for-profit initiative by EkStep Foundation dedicated to building ai to empower all Indians.

Views are personal and do not represent the stand of this publication.