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Budget 2020: What 5G, AI, Startups and Technology Initiatives in India Can Expect

Budget 2020: What 5G, AI, Startups and Technology Initiatives in India Can Expect

From heavy investments in AI and data privacy allowances, to tax revisions and digital education, this is what tech in India expects from the Union Budget.

The Union Budget 2020 is expected to be a major one for the government of India, particularly with the Indian economy under reported stress. Among other sectors, India's Budget 2020 is expected to make multiple references to the country's technology sector, and include every sector in the Indian technology ecosystem – from the massive IT services industry, to new and fledgling sectors with immense potential such as artificial intelligence and data privacy. On this note, here's taking a look at what the Indian technology industry can expect from the Union Budget 2020 for tomorrow, and some points that they might be wishing for, but seems doubtful for the government to execute right away.

Information technology services

Beginning with the massive IT services industry of India, while the country is already considered to be one of the leading nations in information technology in the world, Budget 2020 might bring some much needed breathing room in a bid to pull the industry through. Expectations shared by various analysts in numerous reports on the internet suggest that the IT sector's biggest demand would be the introduction of multiple tax reliefs and cuts. These include major decisions on corporate tax rates, reduction of share buyback tax for employees, and more.

AI and advanced technologies

Continuing on the same vein, tax benefits are also expected to feature in need generation sectors such as artificial intelligence, deep technology, machine learning, virtual reality, big data analytics, 3D printing and more. The latter is the ideal candidate of how the government's decision during the Union Budget would be crucial – 3D printing is truly changing the face of many industries at a manufacturing and production stage. As a result, tax benefits in these relatively nascent technology industries can provide a major push for startups and companies in India to work on these fronts.

These benefits are also expected to improve government backed research and development efforts in AI, while also helping private entities ramp up their efforts here. Coupling the private sector with central initiatives will be crucial, so the Union Budget 2020 may make major announcements and sanctions towards the National Centre for AI. This may be further underlined by new announcements in fields such as digital learning and education, similar to what the government has already done with its Digital India and Skill India initiatives.

Skill and teacher training initiatives

Lastly, this can also come with announcements from the government regarding industry level skill training in areas such as big data analytics, AI, virtual reality and more, which are typically not included in the Indian school education system. As a result, real world skill training in industries like these may give a much needed boost to the Indian economy, and also help it catch up with China, USA and other nations in these sectors. The Budget 2020 might also include mentions to teacher training programmes, which will be key to promoting new sectors such as robotic process automation.


Both mainstream tech and edu-tech startups are expecting key tax reliefs from the government as part of the Union Budget 2020. While edu-tech startups may get healthy tax benefits in a push to promote digital education, the overall startup ecosystem is eager to see an extension of tax deduction period, up from seven years to 15, at best. Given the state of economy, startups might also receive an extension to the maximum period in which they can carry forward their losses.

Data security and privacy

Given so much talk in terms of data security and privacy over the past one year, the government might push to allocate resources towards these areas in Budget 2020. This may include budget allocation to establish government infrastructure, as well as recommended data security standards, for the next fiscal year. As an outlier chance, niche benefits might also be in place for data security compliance by startups, corporate firms and even government bodies.

5G and telecom industry

Lastly, 5G might be a key aspect highlighted at Budget 2020. Given the state of the telecom industry, expect the government to take steps in order to aid the ailing telecom operators. Also expect talks on 5G spectrum, which will be crucial if India aims to seriously compete with China and other early adopters in terms of being at the forefront of technology.

Smartphones and device manufacturing under the Make in India initiative is also expected to feature in the Budget task list. With the ongoing US-China trade tensions, many are of the opinion that the time is ripe for India to cash in as a manufacturing and export hub, and the Union Budget may propose strategies and opportunities for international brands to conduct even more business in India.