New Delhi 02nd February 2024: Today Finance Minister of India Nirmala Sitharaman presented an interim budget for 2024-25 in Indian parliament where she proposed a corpus fund of rupees one lakh crore (USD 12B+) for fifty-year interest free loan to tech. startups working in research and innovation in sunrise domains like deep tech., AI (Artificial Intelligence). The proposed corpus fund will provide long-term financing or refinancing to private sector with long tenures on low or nil interest rates.
Tech. Analyst 5 Jewels Research (5JR) sees this proposed $12B+ research and innovation fund provisioned in interim budget presented today by Indian finance minister as a catalyst for building half trillion dollar ($0.5T) Indian Tech. Startup Economy.
Giving his analyst insights on this year’s interim budget of Govt. of India Chief Analyst of 5 Jewels Research (5JR) Mr. Sumant Parimal said “Even this year interim budget has technology, innovation and startups focus in line with previous years Modi Govt. budgets, which is very encouraging for tech. and startups segments. This one lakh crore rupees corpus fund ($12B+) proposed in year 2024 interim budget of Govt. of India is going to act as a catalyst for accelerating growth of technology research and innovations in India through commercial entities like startups, leading to higher tech. startups contribution in Indian economy, which is estimated to the tune of half a trillion dollar ($0.5T) over the years. This $12B+ fund targeted for tech. startups is getting injected by the Govt. of India when last year private funding in Indian startups saw a deep decline due to geo-political and other economic reasons. Further this $12B+ fund shall bring long term sustenance among Indian tech. startups as loan re-payment duration is too long upto 50 years with very favorable terms and conditions like zero to nominal interest rate as its focus is to build innovative sustainable startups keeping in mind long term economic goals of the country, which is different to the private investments which are typically focused on immediate financial returns with valuation pressures ”.
“With private funds, typically startup’s majority ownership goes to the parent VCs who are mostly overseas funds, but with Govt. of India coming as investor in Indian tech. startups, majority ownership of such govt. funded Indian startups to remain among Indians or Indian entities, which shall create many Global Indian brands and Indian MNCs in long term. Hence today’s announcement of Finance Minister of India for creating a corpus fund of rupees one lakh crore (USD 12B+) for fifty-year interest free loan to tech. startups working in research and innovation in sunrise domains is actually targeted towards building a million global Indian brands, which I personally emphasized in year 2021” Mr. Sumant Parimal add further.
5JR’s Chief Analyst further adds that the new scheme announced in today presented interim budget of Govt. of India for strengthening deep-tech technologies for defence purposes and expediting ‘Atmam Nirbhat Bharta’ (Self Reliant India) is another positive step taken towards deepening cutting edge new technology deployments in Indian defense forces, and it will boost Quantum Technology, Robotics and AI (Artificial Intelligence) deployments in our armed forces making it technically stronger to compete with nearby military powers like China.
Further details and implementation approach of both announcements viz. creating a corpus fund of rupees one lakh crore for promoting research and innovation through startups and new scheme for strengthening deep-tech technologies for defence purposes are awaited from Govt. of India.