While improving India’s physical infrastructure was one main concern of the Union Budget 2023, it is easy to say that transforming the nation’s digital landscape was of equal importance.
The Finance Minister made several important announcements that pave the way for a tech-driven nation and enable financial inclusion. The Budget focused on deeper penetration of digital services into business processes and customer interactions by means of:
Providing impetus for research in AI, ML and 5G
Simpler KYCs and expanded DigiLocker services
How Budget 2023 Lays the Groundwork for Digital India
DigiLocker Gets Thrust and KYC to Get Simpler
In her presentation of the Union Budget 2023, the Finance Minister promised a streamlined KYC process, moving away from a one-size-fits-all model to a risk-based approach.
KYC is a regulatory process that acts as a door to you accessing financial services. By pledging to make KYC simpler, the Government aims to promote financial inclusion while also:
saving time
bringing down costs
improving customer experience
A stronger digital infrastructure for KYC will also help eliminate instances of financial fraud.
In the Budget, great emphasis was laid on DigiLocker, India’s cloud-based platform for storage, sharing, and verification of authentic digital documents. These digital documents are to be treated on par with their physical counterparts and can be used for authentication purposes.
By integrating DigiLocker into the KYC process, FinTech firms can further streamline their onboarding processes and root out errors that occur with physical processing. In her speech, the Finance Minister urged financial sector regulators to adopt a KYC system that lends itself fully to Digital India.
India already possesses a strong foundation for digital services in the form of India Stack, UPI, Aadhaar, PM Jan Dhan Yojana, and Video KYC. The vision of Budget 2023 is to further develop DigiLocker by adding to the documents it supports.
This will help spur new FinTech innovations and support customers in accessing a wider range of digital services.
With DigiLocker, Aadhaar to Become Foundational Identity
The Budget 2023 also proposed a one-stop solution for reconciling and updating identity and address details held by government agencies, regulators, and regulated entities. This will be facilitated using DigiLocker and Aadhaar will act as a foundational identity.
This is likely to help the Government keep data consistent and real-time, across the board. For instance, if you update your name in Aadhaar, it won’t automatically reflect on all Government services that use Aadhaar for registration.
However, the Government seems to be keen to lay a strong back-end for real-time updating of citizen records. In the future, updating your records across portals could be a matter of completing one digital form.
Entity DigiLocker - A Timely Digital Boost to Organisations
DigiLocker is an online repository started for individual citizens. Now, the Government plans to roll out a similar service called Entity DigiLocker for MSMEs, large business, and charitable trusts.
This will help facilitate the storage and sharing of documents between organisations and government authorities, regulators, banks and other businesses via the online mode. Experts suggest that Entity DigiLocker will provide a layer of digital security to organisations and help avert cybercrime.
Similarly, Entity DigiLocker can help MSMEs and other businesses integrate better with India’s prevailing digital infrastructure. This can be a doorway to further FinTech innovations and streamlined financial operations.
Educating and Upskilling for a Digital India
Transforming India into a digital landscape requires work at the grassroots level. Considering this, Budget 2023 made sure that young minds access quality information. This is via the proposal for a National Digital Library for children and adolescents.
Financial sector regulators will also aid in the education process, and this would lead to an involvement with India’s FinTech journey at an early age. Alongside enabling financial inclusion, the Budget’s thrust on e-learning will also benefit India’s edTech sector.
To skill youth for the jobs of tomorrow, the Budget proposed the Pradhan Mantri Kaushal Vikas Yojana 4.0. Some of the significant inclusions in this training programme are courses on:
Mechatronics
AI
3D printing
Coding
IOT
Drones
Robotics
Soft skills
What’s more, 30 Skill India International Centres are to be setup across India for training for international jobs. The Government will also rope in MSMEs in the creation of a unified Skill India Digital platform.
All these measures will help include the youth in India’s faced-paced digital narrative. As an incentive, stipend support will be provided to roughly 47 Lakh youth over a three-year period.
Focus on Innovation in AI and 5G
While 5G is only just taking root in the country, Budget 2023 lays the framework for quick adoption of the latest in technology. There will be 100 hundred labs setup at engineering colleges to explore the potential of apps and business models based on 5G services.
Some areas of research will include:
Smart classrooms
Intelligent transport
Healthcare
Precision farming
Besides steering the nation towards a knowledge-based economy, these labs will aid in job creation and innovation in the telecom sector.
Budget 2023 also proposed the establishment of 3 centres of excellence for Artificial Intelligence at leading educational institutions. This is in line with the vision of “Make AI in India and Make AI work for India”.
It is promising to see the emphasis laid on research and the stress laid on digital infrastructure. Hand in hand, these will power India’s digital transformation and benefit start-ups.
Anonymized Data to Propel ML-Related Innovations
The Finance Minister proposed a National Data Governance Policy that would provide entities access to anonymized data. Data anonymization involves deleting or encrypting personally identifiable data from a database.
The data is still credible and useful for research, but personal information is guarded. Access to anonymised data will serve as a huge boost to start-ups as per experts. The reason is that to verify an approach one needs to perform algorithms on large, real-life data sets.
This is often beyond the reach of fledgling companies and academia. With this proposal, there will be renewed interest in machine learning, which is a key component of India’s digital journey.
Alongside the announcements on KYC, DigiLocker, AI, ML, and 5G, the Budget also promised:
Investments in AgriTech
Allotted funds for the e-court project
Tax reliefs to start-ups and MSMEs
All this leaves no doubt that the Budget was formulated with an eye on enabling digital transformation in India.
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