What Union Budget 2021 holds for the AI Industry

Updated : January 22, 2021 07:49 PM IST

Cutting-edge technologies such as AI, ML, Blockchain, and Big Data are immensely beneficial and sustainable for several industries

Artificial Intelligence (AI) has reached the summit of the technology mountain. Even before the unprecedented cascade of events that took place in 2020, the AI industry had established the immense value it holds for businesses across verticals, especially for tech-based companies that leverage technology for everyday business. Indian companies have caught up quickly to the rapid global evolution and adoption of technology.

According to a joint study by NASSCOM and EY, 74 percent of Indian enterprises have established either a formal strategy or obtained C-Suite sponsorship to initiate or scale-up their AI programmes.

For AI-led businesses such as media-tech and digital media-tagging platforms, the past year has been a surprisingly good one despite the pandemic wreaking havoc on nearly every industry. Having stepped into 2021 riding a high, the AI industry looks to continue its growth streak, and with the Union Budget for 2021-2022 set to be announced soon, here are a few key projections regarding what this year’s budget holds for the AI industry.

Boosting AI growth and development

Among many, one of the key expectations, as touched upon earlier, is the AI industry continuing its remarkable growth trajectory. However, for this to take place, the industry will need government funds along with visibility and increased access to facilitate growth and development in the sector. With new-age technologies such as cloud computing expected to grow from more than $371 billion in 2020 to over $832 billion by 2025 at a CAGR of 17.5 percent, the industry will expect more funding to facilitate infrastructure development.

With adequate funding, access to resources, and visibility, companies using AI as their primary technology will look to optimize their business models to suit the current global scenario and scale their business. When we consider companies such as media-tech platforms, they are bound to invest more in tech-based infrastructure as 2020 was a year of unprecedented growth for the industry. Tech-led companies will look to amplify their vision with no restrictions when it comes to the ability to access state-of-the-art infrastructure to boost growth and progress.

Government-led infrastructure for data parks

Although technology is constantly evolving, given the damage inflicted by the COVID-19 pandemic, the need for infrastructure has skyrocketed. As compared to 2019, the economic loss due to the pandemic has been estimated to be between Rs 18-20 lakh crore which makes up around 9 percent-10 percent of the country’s GDP. A major boost in infrastructure is the need of the hour to ensure that the country is on the road to recovery. AI-led businesses will be expecting government-led infrastructure investment for data parks to facilitate technological revolution and help the country get back on its feet when the Union Budget 2021-2022 is announced.

Data Centers now serve a crucial role given the surge in usage of smart devices, internet proliferation, and high data consumption across the country. According to the industry body Confederation of Indian Industry (CII), the central government will need to aggressively intervene and invest heavily to lift the economy at a time when state governments are trying to cut back on the expenditure and losses owing to the past year’s events. Creating fiscal space for infrastructure projects such as data parks will not only enable economic revival but also act as a catalyst for job creation and offer a much-needed boost for the country’s tech-based startup ecosystem.

Without a doubt, cutting-edge technologies such as AI, ML, Blockchain, and Big Data are immensely beneficial and sustainable for several industries. As AI-led companies continue to push the frontiers of technology, continued support and investment from the government will set the sector on the right track and might even enable India to achieve its vision of becoming a $5 trillion economy by becoming an AI superpower.

The author, Vinayak Shrivastav is Co-Founder and CEO at Toch. Views are personal

Published : January 22, 2021 07:38 PM IST

What Union Budget 2021 holds for the AI Industry

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