Introduction
India has become a global leader in the Fintech sector thanks to the development of its digital payment provisions and UPI. India’s digital economy is a key focus area of the Union Budget 2025 since it is expected to contribute to one-fifth of the country’s GDP by 2026. With the budget allocation, companies that are offering advanced payment solutions, blockchain financial services and a global payment platform can also access the market better.
The transformation of India’s digital economy paves the way for the country to foster economic growth, better social inclusivity and usher in environmental sustainability amongst other things. This is why how the Budget 2025 chooses to allocate funds towards India’s digital economy is such a crucial aspect to analyze. With the right allocations, India can truly usher in tremendous digital developments, which would only end up adding to the overall development of the country.
India’s Digital Economy has seen a consistent inclusion in Union Budgets historically. The 2017-18 Union Budget also targeted the expectation of 2,500 crore digital transactions through USSD, UPI, IMPS, Aadhaar Pay, debit cards etc. The main goal of this initiative was to help reduce the population’s dependence on cash transactions.
The 2022 Union Budget of India was particularly focused on the digital and technology infrastructure of the country. Since this budget was India’s second pandemic budget, it delivered a road map that is expected to help the country progress economically between India’s 75th and 100th Independence years. This budget in particular focussed on providing e-services like digital banking, better internet connectivity access to electric vehicles, etc, to the population.
Key Expectations for India’s Digital Economy
Of the many expectations that the IT sector holds ahead of the Union Budget 2025, some of its main focus is on policies that might come into play to encourage innovation, growth, and job creation in the industry. The sector is also looking forward to the introduction of incentives that help adopt emerging AI technologies like blockchain and quantum computing while also focusing on tax relief for R&D investments.
The expectations for better skilling programs where AI and cybersecurity are also on the table from the IT sector’s end. It also holds onto hope for provisions in the Union Budget 2025 that will help in the expansion of the overall digital infrastructure of the country while providing support to startups. CEO of TeamLease Digital, Neeti Sharma, hopes that the Budget 2025 will provide tax concessions for the data centre sector as they are crucial to digital services and India’s 'Digital India' vision.
Of the changes India’s digital economy sector expects from the Union Budget 2025, it hopes that policy changes and updates focus on increased investment in the digital infrastructure and better regulation for emerging techs like blockchain and AI. Other than this, the sector also hopes that policy changes targeted towards bettering cybersecurity measures, the introduction of initiatives focussed on digital literacy and help simplify the cyber protection laws that are already in place.
Additional Read: What to Expect for the E-commerce Industry?
Challenges to Address in Budget 2025
Despite the growth of India’s Digital Economy in recent years, the sector has had to face its fair share of challenges. The main challenges, in this context, are cybersecurity and data privacy issues. With the constant adoption of digital technologies in our day-to-day lives, the growing threat of fraud brings to the fore the importance of having strong data protection measures.
Other than this, with the constant evolution of the regulatory landscape, staying ahead of compliance requirements is crucial.
As previously stated, of the many expectations that India’s digital economy has from the Union Budget 2025, better skilling programs where AI and cybersecurity are also on the table from the IT sector’s end. This will help jump over hurdles like issues of digital privacy.
