Boost for blockchain and clear laws for crypto, web3: Digital India’s Budget wish list
While television continues to dominate the media landscape in India, like much of the rest of the world, it should come as no surprise that digital is making rapid inroads. As per industry reports in 2021, India’s digital media market was valued at over Rs 30,000 crore with estimates projecting that it will increase to Rs 53,700 crore by 2024.
And with general elections due around the same year, the Union Budget 2023, due to be released this Wednesday, is the latest boost to the economic policies of the government as it aims for a third consecutive term in power, with industry watchers paying attention to plans for emerging technology in the digital space.
Keerthi R Kumar, Business Head-South, FoxyMoron, notes that the Indian government has already taken several measures to promote digital media and technology, such as the introduction of the Digital Media Ethics Code Rules 2021, and the Digital India initiative.
He says: “To further promote digital media and technology, especially blockchain and its applications, in 2023, the Indian government could consider the following measures: launch of the digital rupee (the digital rupee is the central bank’s digital currency, and it is widely accepted as a safer alternative to cryptocurrencies); relax regulations on cryptocurrency; and invest in research and development.
Kumar adds that the Indian government may consider providing tax breaks and subsidies to companies investing in blockchain technology, as this will help further promote the adoption of blockchain technology in India.
The budget proposal defines virtual digital assets as “any information, code, number or token (not being Indian currency or foreign currency)”. According to Kumar, to encourage the use of blockchain technology in India, the Indian government may consider relaxing cryptocurrency regulations.
Amer Ahmad, Chief Technology Officer, Blink Digital, argues that regulation and clarity is all that is needed from the government.
“India is among the largest users of web3. Despite this, we have no clear rules about crypto and the web3 space. This means that even when we look to create campaigns for brands that involve activities with NFTs or the metaverse, this lack of regulatory clarity makes brands very apprehensive and reluctant to enter the space,” Ahmad said, adding, “ More so, the current taxation and TDS regulations are hugely detrimental to the space. If we want to become a web3 hub and let it flourish, the government needs to come out with clear and constructive rules and move away from its current flip-flop attitude.”
“We have entered this new year with high hopes and significant growth expectations for blockchain applications for crypto and web3 with the rollout of 5G along with the booming metaverse. Our country will further strengthen this evolving industry with more streamlined regulatory measures in place. Well-defined crypto laws will provide clarity and encouragement to brands and agencies to explore further,” noted Mitesh Kothari, Co-Founder and Chief Operating Officer, White Rivers Media.
“The advanced blockchain technology also comes with significant potential for public applications such as digital payments, land registrations, notarization, supply chain traceability, healthcare, education, data management, auditing, taxation, voting, etc. It would also be an advantage if we can achieve international cooperation to regulate laws around crypto with an evaluation of the risks and benefits,” Kothari added.
The potential of blockchain comes into sharper focus when you remember that the Modi government’s roadmap for India to become a five trillion dollar economy by the end of the decade is based on, among other things, digital assets created and exported to the world from within the country. .
Vivek Kumar Anand, Director – Business and Innovation, DViO Digital also believes that blockchain technology has immense potential to not only bring efficiency to various government initiatives but also create massive employment opportunities and position itself as a global leader in attracting businesses, entrepreneurs and talent worldwide, enabling economic growth in the country.
According to him, there are three significant steps that the government can take and include in the upcoming budget. The first is the adaptability of the blockchain in the various programs, such as ownership transfer records for the vehicles to enable the incorruptible, decentralized and transparent log, taxation and unified health IDs to encrypt and exchange patient data efficiently.
The second is industry creation, with Anand noting, “Given the growth we have seen in digital and IT-related services, where we are among the leading countries in this segment, it makes sense for India to take charge and lead the blockchain revolution by offering an ecosystem, infrastructure and policies that support this industry, making it a haven for blockchain entrepreneurs worldwide will ultimately result in employment and economic growth.
“And third is talent creation, given that there is going to be an increase in demand for talent with expertise in blockchain, AI and meta, and there is an opportunity for India to park a budget to support training and education in this domain in terms of the scholarship or even as government-supported skills-based programs. It will help create a talent pool that is not only employable, but also helps take our education system to the next level and position us as a global leader.”
The Digital India initiative of the government includes a program to encourage collaboration between industry players and academic institutions in the development of innovative solutions. Furthermore, the government has issued the National Digital Communications Policy 2018 to stimulate collaboration between industry and academia in the development of digital communications technologies. To promote the use of blockchain technology in the country, the government has already launched the National Blockchain Framework.
Rajagopal Menon, Vice President, WazirX, suggests that the government could establish a blockchain mission that brings together industry leaders, academics and government officials to share knowledge, collaborate on research projects and improve the quality of governance.
“The government has the ability to create a regulatory environment that promotes the growth of digital media and technology. For example, the Reserve Bank of India’s (RBI) guidelines on the use of digital payments and mobile wallets have contributed to the growth of these services in the country. For example, the government can issue guidelines for the use of blockchain technology in financial services, supply chain management and land registration, he says, adding that other measures can (and should) include tax breaks, incubation and acceleration programmes, and of course more R&D.
Bharat Patel, chairman and director, Yudiz Solutions Ltd, believes that a top priority for the central government should be to establish a cyber security task force and increase spending in this area. “While recognizing the growth of lucrative sectors like metaverse, gaming and blockchain, we also need to focus on skill development, start with basics, establish infrastructures and continue to explore the sectors broadly. The AVGC sector (animation, visual effects, games, comics) should get a huge boost as it’s huge scale.”
He adds that the country has the expertise and talent to excel in the game development category and publish these games at the global level. “The concepts and ideas should be inspired by our mythological stories like Amar Chitra Katha, Mahabharata and Ramayana. We have talent, concepts and ability to use advanced technologies, it just needs a little push from the government to recognize it and take necessary decisions, Patel noted.
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