The Union Budget for 2024-2025 reflects the government’s strong commitment to boosting various high-impact sectors through strategic financial allocations. The announcement of a Rs 1000 crore venture capital fund for the space sector, coupled with the proposal for 12 industrial parks, demonstrates a clear focus on expanding India’s space economy. Additionally, the abolition of the angel tax and significant funding for research and innovation are set to drive technological advancement and economic growth. The highest-ever defence allocation underscores a commitment to national security and self-reliance. These measures collectively highlight the government’s holistic approach to fostering innovation, supporting startups, and enhancing the country’s global standing across key industries.
Reactions from the Defence and Space Sectors
Lt Gen AK Bhatt (Retd.), Director General, Indian Space Association (ISpA), “The Union budget’s vision to grow India’s space economy by fivefold in the next decade demonstrates the government’s strong commitment to this sector. We previously advocated for increased financial incentives to support the burgeoning space startups in the country. The announcement of a Rs 1000 crore VC fund is a step forward, addressing the funding challenges faced by these nascent ventures in this capital-intensive domain. Additionally, the proposal for establishment of 12 industrial parks across India we hope will include the space sector as this will provide a substantial boost to the space and satellite manufacturing industry, which has long called for the creation of space parks. These measures are pivotal for the growth and development of India’s space ecosystem.”
Apurwa Masook, CEO, SpaceFields: “Continuing with the demand for thematic sovereign funds, the FM announcement on Space-focussed VC fund is a highly welcome step. This continues to accentuate the Government’s commitment towards nurturing and growing the space economy, and will provide a lot of comfort to domestic and global investors alike, complemented with abolition of Angel Tax. At the same time, we eagerly await the implementation and operationalization of the 1 lakh crore corpus for R&D and innovation in sunrise sectors, which was earlier announced by FM. The need for demand creation & assured procurement channels for the private space sector is a strategic imperative, and there is a critical need to liberalize General Financial Rules (GFRs) for Govt to serve as an anchor customer throughout the product development lifecycle.”
Anirudh Sharma, CEO, Digantara, says: “This initiative marks a pivotal first step towards our vision of India as a major player in the global space economy. While it’s a promising beginning, sustaining this momentum requires a strategic approach involving diverse investments. By nurturing innovation across the spectrum of risk, we can fully harness India’s potential and establish our nation as a global space leader.
We need more domestic customers, especially as space is a strategic sector. It is crucial for the state to act as a primary customer, driving demand and fostering a robust ecosystem. Additionally, there must be a mandate for the state to invest in research, capacity development and high-risk areas.”
Defence Allocation
Ashish Saraf, VP and Country Director, Thales in India, says: “We applaud the government and Finance Minister for the landmark allocation to the Ministry of Defence in the Union Budget 2024-2025, reflecting a strong commitment to national security and technological advancement. The highest-ever allocation of Rs 6,21,940.85 crore, representing 12.9 percent of the total budget, is a testament to the government’s focus on strengthening our defence capabilities. The capital outlay of Rs 1,72,000 crore will enhance the capabilities of our armed forces by adding new advanced tech equipment. Furthermore, the earmarking of Rs 1,05,518.43 crore for domestic capital procurement is a major boost to the ‘Atmanirbhar Bharat’ initiative, promoting self-reliance in defence manufacturing and enhancing defence exports. We are also pleased to see the allocation of Rs 518 crore to the iDEX scheme, which will foster innovation and support startups, MSMEs, and innovators in the defence sector. These initiatives not only reinforce the ‘Make in India’ vision but also align with the broader goal of ‘Viksit Bharat 2047,’ positioning India as a global leader in defence technology and innovation. At Thales, we are committed to contributing to these transformative efforts, leveraging our global expertise to support India’s journey towards self-reliance and excellence in defence.”
Rama Krishna, Co-founder & CEO, EndureAir: “We’re excited about the government’s new initiatives to boost research and innovation in Budget 2024. The establishment of the Anusandhan National Research Fund, along with Rs 1 lakh crore in financial support for private sector research, will be a game-changer for industry players. This provides us with the resources needed for groundbreaking developments, which everyone has been eagerly anticipating.
Another major reform in favour of businesses is the abolition of the angel tax and the reduction of corporate tax rates from 40 percent to 35 percent. This will not only attract foreign investment but also support startups. These changes will help us innovate more freely and expand our capabilities, contributing to India’s technological and economic growth. We’re excited to leverage these opportunities to push the boundaries of UAV technology and support the nation’s progress.”
Pratap Daruka – Chief Financial Officer, Tredence, says, “The 2024 Union Budget has taken bold steps to boost the economy and promote growth across various sectors. The abolition of the angel tax is a welcome move for many new-age startups, alleviating a significant financial burden and encouraging more innovation and investment.
Additionally, the Rs 2 lakh crore package for skill development and employability through various programs is commendable and a significant move towards building a skilled workforce. However, to fully realize AI’s potential and ensure India captures a larger share of global AI investments, a more focused approach is necessary. Further emphasis on R&D grants and tax credits is essential. These steps will catalyze the development of cutting-edge solutions and significantly impact employment by creating millions of new jobs and transforming existing roles.
While the government’s initiatives are a step in the right direction, a concentrated effort on AI will ensure India not only keeps pace with global advancements but also becomes a frontrunner in the AI and analytics space. It is now imperative for the government, universities, and corporates to collaborate and leverage these initiatives to drive sustained economic growth and innovation.”