Budget 2024: Govt announces Rs 1 lakh crore corpus for interest free loan to bolster research and innovation

The government’s focus towards technology has been evident over the last ten years. From initiatives such as Digital India to Digital Public Infrastructure, India is evolving as a digital economy. And during today’s Budget Speech, Finance Minister Nirmala Sitharaman said, “For our tech savvy youth, this will be a golden era.”

“The Honorable Finance Minister emphasized the crucial role played by Digital Public Infrastructure in fostering inclusive development centered around the people. There has been a substantial increase in budget allocation for Research and Development (R&D) in IT/Electronics, Cybersecurity, and e-Governance, marking a positive stride towards realizing the vision of Digital India. Notably, 1500 Crores have been earmarked in the budget for the third phase of e-court development, a move expected to revolutionize the delivery of justice, making it more efficient and accessible to the common man,” says  Devroop Dhar, Co-Founder & MD, Primus Partners.

With this announcement, the government has announced a corpus of Rs 1 lakh crore that will be established with fifty-year interest free loan. This corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. “This will encourage the private sector to scale up research and innovation significantly in sunrise domains. We need to have programmes that combine the powers of our youth and technology,” added Nirmala Sitharaman.

In addition, a new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’. 

Devroop Dhar, Co-Founder & MD, Primus Partners adds, “the establishment of a corpus to provide interest-free or low-interest loans for driving innovation has the potential to be a game changer, promoting comprehensive innovation and fostering the growth of technology-driven organizations.”

The corpus is being looked upon as a measure that will empower private sectors to lead innovation. Eswara Rao Nandam, Founding President of Polymatech Electronics says, “the Finance Minister's visionary approach in allocating a substantial ₹1 lakh crore for long-term interest-free loans aimed at fostering innovation. As a semiconductor chip manufacturer, we acknowledge the pivotal role of innovation in our industry.”

He adds, “This substantial financial backing not only grants us the capacity to invest in cutting-edge research and development but also highlights the government's dedication to fostering growth in emerging sectors. The funding will empower the private sector to lead initiatives that push the boundaries of technology, positioning us at the forefront of semiconductor development.”

Industry says these strategic investments align with India’s pursuit of steering towards a future where India can take a global lead in innovation.

Also Read: Interim Budget 2024: Here’s the latest on income tax slabs and rates for new and old tax regimes