India bolsters digital agriculture and space tech in Budget 2024

India has introduced a slew of initiatives in its latest budget to expand its space technology capabilities and accelerate digitalisation in key industries such as agriculture.

“The global economy, while performing better than expected, is still in the grip of policy uncertainties,” said India’s finance minister Nirmala Sitharaman. “Elevated asset prices, political uncertainties and shipping disruptions continue to pose significant downside risks for growth and upside risks to inflation.”

Despite the economic uncertainty, India is pushing ahead with its digitalisation mandate. For instance, India’s Digital Public Infrastructure (DPI), a suite of digital platforms and services including data exchange systems and digital payments, will be extended to the agriculture sector.

In practical terms, DPI for farmers will be rolled out by the central government in partnership with state governments. Over the next three years, this will cover farmers and their lands, starting with a digital survey of Kharif crops in 400 districts later this year.

Kharif crops, or autumn crops, are domesticated plants such as rice, cultivated and harvested in India during summer. The kharif season varies depending on the crop and location.

The services sector is expected to benefit from the DPI as well. Software applications will be made available at scale for productivity gains, business opportunities and innovation by the private sector, in areas such as e-commerce, education, health and logistics.

Plans are also in place to fully digitalise GST (goods and services tax), customs, and income-tax payer services within next two years. Rahul Kashikar, partner and head of tax technology and transformation at KPMG in India, said the move is transformative, noting that the shift to digital tax governance will encourage enterprises to embrace technology in tax functions.

To manage larger volumes of data spurred by digitalisation, not only in tax governance but in government services, technology tools will be used for the collection, processing and management of data and various sectoral databases, including those established under the Digital India mission.

Building on India’s space achievements, this year’s budget includes a Rs 1,000 crore ($119m) venture capital fund aimed at expanding the country’s space market by five-fold over the next decade. More than 180 government-recognised space technology startups are expected to benefit from the funding.

According to Pushan Sharma, director of research at CRISIL Market Intelligence and Analytics, India’s space market has seen startup engagement skyrocketing from just one in 2012 to 189 in 2023 as entrepreneurs started looking beyond traditional sectors to include satellite manufacturing and development of reusable launch vehicles.

The number of use cases for the space sector has also increased with higher private sector participation, extending to newer ways of credit risk assessment for the agriculture sector and project monitoring, among other areas, Sharma added.

Meanwhile, micro and small and medium-sized enterprises (MSMEs) will get more support from this year’s budget. E-commerce export hubs will be set up through public-private partnerships to bolster the growth of the MSMEs and enable them to compete globally.

These efforts are among the government’s strategic initiatives to support MSMEs through the ONDC (Open Network for Digital Commerce) platform, streamlined financing, and simplified GST reforms.