Union Budget 2021 Expectations for Startups: The forthcoming union budget is one of the most important as many space startups are on the verge of doing their first space journey. The budget should concentrate more on enabling the stakeholders that support the startups than directly supporting them with grants/funds.
- By Vishesh Rajaram
Union Budget 2021-22 Expectations for Startups: Indian space economy is currently valued at $7 billion and it comprises 2 per cent of the global space economy and the Indian space sector needs to grow at an approximate rate of 48 per cent CAGR over the next five years to reach its target of $50 billion. The government has announced a separate organisation (IN-SPACe) as an extension of ISRO to support the private space activities. The space industry can boost job opportunities in the coming years as it involves a spectrum of streams. The forthcoming union budget is one of the most important as many space startups are on the verge of doing their first space journey. The budget should concentrate more on enabling the stakeholders that support the startups than directly supporting them with grants/funds.
Opening up the knowledge base and facilities of ISRO would be a game-changer in the market as that will reduce the infrastructure cost of the private player which in turn reduces the cost of building the product. As the testing and related infra constitute a huge chunk of the manufacturing cost of the flight-qualified hardware. The access to the knowledge base will reduce the time of building products. As ISRO being the hub for innovations, access to the products like sensors and in house service units developed by ISRO in a subsidised space would reduce the cost and time taken by startups in finding quality vendors for the specific application. This will also boost the manufacturing of indigenous space products.
Concession in tax for the suppliers of the startups would create a huge impact on the supply chain. As space application needs a lot more accuracy and precision, research and development is needed on the supplier that would increase the cost of production, which would be compensated by tax concession. Creating a mandate for the corporate to help startups would create the ground for collaboration and will lead to innovations in the conventional industry space. In addition, relaxation can be extended to space startups in case of any research/product related imports.
Attracting foreign portfolio investors and customers towards India by showcasing our space products would be another vertical that has to be explored. Investor summit in addition to Defexpo, Bangalore space expo to attract investors and customers towards India. This can also be a forum where players interested in space across the globe can interact and can be a possible avenue of business collaboration. Apart from this international delegations for founders to get exposure to the global ecosystem.
Legislation and dispute resolution mechanism in the space sector should be strengthened as more players are getting into space through an establishment of space law and a separate arbitration council. Creating an industrial pressure group from the players in the space sector would help the private players voice out their opinions better.
Creating awareness about the space industry and opportunities like space clubs, forums in academic institutions will streamline the flow of skillsets to the startups. Space-related hackathons can be organised at the school and college level with help of startups in order to solve their problems and hire resources. Special slots for space startups can be allotted in premier institutions like IITs, NITs, and state universities in order to get access to top talents. Promoting the budding entrepreneurs through grants and innovation funds established by Startup India would increase the number of startups.
Vishesh Rajaram is the Founder and Managing Partner of Speciale Invest. Views expressed are the author’s own.