Abolition of angel tax significant milestone; will boost startup ecosystem: IT Minister

New Delhi, Jul 23 (PTI) The Union Budget announcement on the abolition of the angel tax is a significant milestone that will boost the startup ecosystem in India, IT Minister Ashwini Vaishnaw said on Tuesday.

The customs duty cut on phones, mobile PCBAs and chargers, and expansion of the digital public infrastructure (DPI) model to multiple other sectors would spur growth and help democratise technology, he added.

The abolition of angel tax is a "very good decision" and has been the biggest demand of deep tech startups, Vaishnaw said, adding that the move will spur investment in startups.

"Angel tax has been a long-standing issue...deep tech startups had a major issue on how do you do valuation... that point has been addressed with its abolition," he said at a post-budget conference.

The minister said India has taken big strides in domestic manufacturing of mobiles, laptops and servers, and the focus now is to encourage component manufacturing.

The process of framing rules under the Data Protection Act (DPDP Act) is in the advanced stage, he said, adding that "we will place rules for public and stakeholder consultation soon".

The government has heard every voice as it crafted the DPDP Act and the same philosophy of wide consultations will be followed for the rule-making process as well, the minister assured.

The minister further said electronics and mobile phone manufacturing has boosted job creation in India over the last 10 years.

"Digital India has democratised technology. The focus is now on developing a mobile and electronics component ecosystem...The customs duty rationalisation (on mobile phones, chargers and mobile printed circuit board assembly) has been a big demand of the industry, and today's announcements will help develop the component ecosystem, significantly," Vaishnaw said.

According to industry experts, imported mobile phones will become cheaper by up to 6 per cent as the government, in the FY25 budget, has reduced customs duty on such shipments to 15 per cent from 20 per cent earlier.

Meanwhile, Vaishnaw said that server and laptop manufacturing has started to take off in a big way in India.

He informed that HP shipped its first Made-in-India server about a fortnight ago.

India is set to replicate its success in mobile manufacturing into new areas like server and laptop manufacturing now, he pointed out.

Digital India initiative has made technology accessible to the common man, the minister said and added that DPIs (digital public infrastructures) applications in areas like agriculture, education and health would ensure that the benefits of technology should reach all, and not to a chosen few.

It is pertinent to mention that Finance Minister Nirmala Sitharaman, in her Budget speech on Tuesday, proposed the development of DPI applications at the population scale for productivity gains, business opportunities and innovation by the private sector.

These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

"In all, the budget has a lot of good announcements in areas like electronics manufacturing, expansion of DPI and initiatives for digital India, Startup India and Make-in-India," Vaishnaw said. PTI PRS MBI MBI BAL BAL