Union Budget 2015-16: Focus on IP innovation & securing digital infrastructure

Through its landmark initiatives such as ‘Digital India’ and ‘make in India’, the current government has demonstrated its commitment to not only sustain the growth of India’s ICT industry, but also leverage technology across various aspects of the national development agenda. In the Union budget 2015-16, we expect the finance minister to go a step ahead, and introduce measures that will enable entrepreneurs to sustain long-term innovations within the Indian economy.

The digital medium and platforms on which the implementation of many new policies and initiatives is dependent, are under attack by hackers, fraudsters and other malicious elements. The cyber security scenario is more severe today, driven by rapid evolution of new-age technology and hyper-connectedness, impacting businesses, individuals and governments.

As a company leading the charge in India’s cyber-security industry, we expect the government to act urgently and allocate more monies for cyber security in this budget. It will also be an essential precedent to businesses operating in India to tighten their security framework before offering their services online.

Encourage IP creation to emerge as a hub for innovation
The talent for innovation has found inadequate support, given India's extreme focus on providing IT service. The previous budget made an important point in emphasizing R&D efforts on technologies and start-ups that are relevant to India. But while Indian-made security products are seeing an upswing, sustaining innovation in India is a task in itself. One of the major issues is that financing models are still centered on grants and are not ready around innovation.

We believe that the next wave of growth will be led by small enterprises, provided a sustainable business ecosystem for long-term innovation is created. Accordingly, the upcoming union budget should deliver measures for India to move forward from being an outsourcing hub to an innovation hub. It should leverage our global competency in IT to create an economy that can retain, consume, and export its IP led products and services.

Help Start-ups ‘Make-in-India’
Make-in-India is an important government initiative, leading the shift from an outsourcing destination to being a recognized innovation hub. However, if the government plans to invest in initiatives under the Make in India umbrella, then fundamental issues in the ecosystem need to be addressed.

We recommend that the Union Budget 2015-16 should provision investments under the ‘Make-in-India’ initiative that are focused on creating a nationwide incubation and acceleration infrastructure for tech entrepreneurs, start-ups, and SMEs. Government should incentivize investment in start-ups. But we also recommend provisioning funds for skill development in knowledge-intensive sectors, in order to nurture the skill base and enhance competitiveness.

We also look forward to a generous increase in public sector expenditure to help create new opportunities for smaller players, and a reduction in MAT (minimum alternate tax) that could spur growth in some industries. Easier taxation norms and tariff structures are also expected from this budget to create a smoother business ecosystem.


Aid Transformation to Digital Economy
We also look forward to more initiatives around Digital India. The government should commit itself towards upgrading the legal framework for digital transactions, and bring it up to global standards. This would lead to greater adoption of tech-driven business models, thereby, promoting industries such as eCommerce. The government has been proactive in terms of technology adoption for eGovernance initiatives, which has also contributed towards expanding eGovernance projects. However, introduction of hassle-free policies to enhance speed-of-implementation is a key deliverable we expect from the next budget.

Build a Robust & Secure IT Ecosystem
The surge in cyber-crimes and recorded enterprise breaches in India can dent consumer confidence in the digital medium. In addition to a better legal framework, government efforts to secure state-owned infrastructure such as SDCs will prompt India Inc. to follow suit. We recommend increased grants/investment in bodies such as CERT that are working towards enhancing security standards of Indian ICT.

About the author: This article has been written by Sanjay Deshpande, Co-founder & CEO of Uniken India