Tech 3 | Economic Survey moots Ghar Wapsi for startups, why digital public goods are a goldmine and more

Ahead of the crucial Union Budget on Wednesday, Finance Minister Nirmala Sitharaman tabled the annual Economic Survey in the Parliament earlier today.?

Why it matters: The annual report provides a comprehensive analysis of the state of India’s economy in the financial year that is set to close soon through various indicators.

• It also lays out a path for the future trajectory and flags risks that could be a challenge for the economy.

This year's report is being presented at a time when India's economy is being hailed as a bright spot amid recessionary fears in advanced economies. It pegs India's GDP growth for the next fiscal 2023-24 in a broad range of 6-6.8 percent.

Here’s a quick rundown of all the key tech and startup highlights from the Economic Survey 2023.?

Ghar wapsi for Indian startups

Recently, many heads turned when it emerged that PhonePe’s shareholders would have to cough up around Rs 8,000 crore for shifting the company’s domicile back to India.

It seems the country’s top economic policymakers also took note.?

We say this because the Economic Survey speaks in-depth about ‘flipping’, a term used for shifting a company’s domicile to a foreign country

• Many startups which had flipped themselves away from India are now exploring a ‘reverse-flip’ like PhonePe, it says.

Accelerating the reserve-flip

The report also suggested a few measures that could push Indian startups to shift their official headquarters back to the country:

• Simplifying the taxation regime for employee stock options?
• Easing cross-border capital flows with regulations like that of Singapore, US
• Adopt a capital gains structure such that there are no withholding taxes when distributing dividends to residents or non-resident shareholders

‘Twas raining jobs

Amid a spate of startup layoffs, the Survey said that direct jobs in the country’s startups jumped 36 percent to 269,000 last year.

• The number of recognised startups in the country has increased from 452 in 2016 to 84,012 in 2022.
• ?About 48 per cent of the country’s startups are from Tier II and III cities, signalling a tremendous grassroots potential, it added.

In other startup-related highlights…

• Private equity (PE) investments in agritech have skyrocketed over the past four years with an increase of more than 50 percent per annum, at a time when the rising demand for quality food, and macro tailwinds like climate change and food security concerns has renewed investor interest in the nascent sector.
• Indian e-commerce startups have witnessed a windfall in the post-Covid period, as they have received a renewed push after easing of pandemic curbs. The overall e-commerce order volume witnessed a growth of 69.4 percent year-on-year in FY22.

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