The move towards data localization, data sovereignty from a data privacy point of view, there would be an increased requirement to have data centers established locally, and investments by government, tax reliefs, subsidies could be considered for facilitation
The Union Budget 2022-23 would mostly focus on recovering from the pandemic which would invariably mean a lot of investment being earmarked for the healthcare sector and the allied infrastructure that will be essential for the purposes of proliferation of healthcare delivery services.
With the healthcare sector focusing on digital for delivery of services and products, it is a matter of natural escalation, that it would require higher internet penetration (to the last mile), as well as good bandwidth enabling relay of quality data during a teleconsultation, with a healthcare practitioner. So as a growth propeller, investment into ICT sectors will also be required.
Ease of doing business in the service sector, especially IT and ITES, which have demonstrated their potential, will also be expected from the Budget. Furthermore, as the move towards data localization, data sovereignty from a data privacy point of view, there would be an increased requirement to have data centers be established locally, and investments by government, tax reliefs, subsidies could be considered for facilitation.
With most of the nations moving towards adoption of 5G, which is disrupting and reshaping the entire communications value chain, it will be important for the budget to make considerations in this regard. Commercial deployment of 5G networks from a budgetary, regulatory, and policy standpoint would assist the smaller companies in this field to get onto this new revenue opportunity.
Additionally, expanded utilization of SEZs to include expenses on buying software, leasing of computers, using cloud infrastructure, could boost the IT and the ITeS sectors.
Online gaming companies which have also found a strong footing in the country, and with significant investment interests in the sector, there is a potential for more jobs to be created in the sector, for things like VFX designing, software development, software designing and so forth.
With increased reliance upon digitization, and the government’s adoption of blockchain technology, distributed ledger technology, it is important to bring about uniform policies in the sunrise sector. As these technologies are heavily reliant upon efficient and cumbersome infrastructure, it will be important for the government to have a renewed position with respect to the regulation of this sector.
The encouraging participation in cashless transactions also requires a robust IT framework to support the backbone on which the fintech sector is built upon.
Author: Abhishek Malhotra, Managing Partner, TMT Law Practice