How Budget 2023 takes the Startup movement to towns and villages

With metros like Bengaluru, Mumbai and Delhi emerging as the major hubs the startup movement gained pace in the metros in its intial days. However, it did not take the Tier II cities to jump in, especially with the presence of many leading incubators and educational institutions that nurtured new ventures in cities from Lucknow to Kharagpur to Chandigarh. . 

According to official data, there are With 87,000 recognized startups across 75 industries in the country. And it's not just the major cities that are witnessing this growth - 49% of these startups have emerged in tier II and tier III cities. 

There are 39,855 startups recognized by the Department for Promotion of Industry & Internal Trade (DPIIT).

Infrastructure in Tier II and III cities

A key announcement in the Union Budget 2023-24 was the creation of an Urban Infrastructure Development Fund (UIDF). This fund will be established through use of priority Sector Lending shortfall, which will be managed by the national Housing Bank, said Finance Minister Nirmala Sitharaman. 

Most importantly, this fund will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.

Many Startups flock to the big city in search of better infrastructure. Interestingly, the budget not only meets this need but also aims to create better manpower across the country. The skill development program that the budget envisages will create professionals and workers that are skilled in latest tech including drones, AI and robotics that would pave the way for the future.

Push for Agritech

In her speech, Sitharaman announced the creation of an Agriculture Accelerator Fund. Naturally, empowering startups in the agri-tech sector means, that it is not tier II and tier III cities that will see the growth of startups. 

They are set to mushroom in smaller towns and villages as well. “An Agriculture Accelerator Fund will be set-up to encourage agri-startups by young entrepreneurs in rural areas. The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices,” said Sitharaman. 

The budget for the ASPIRE scheme that promotes entrepreneurship in rural areas has been enhanced.

Tourism Potential

Sitharaman said there is a large potential to be tapped in tourism. She added that the sector holds huge opportunities for jobs and entrepreneurship for youth in particular. The Finance Minister said that promotion of tourism will be taken up on in mission mode. 

It is natural that a lot of tourist sites that are developed will be in in interiors connected with small towns and villages. And there would be many new ventures that could take flight on this wave to boost the country's tourism potential. 

Levelling the Field: Tech-Infra Push

Another unique aspect of the budget is that it creates an infrastructure for the future. 

The FM said that to unleash innovation and research by start-ups and academia, a National Data Governance Policy will be brought out, which will enable access to anonymized data. She also announced that An Entity DigiLocker will be set up for use by MSMEs, large businesses and charitable trusts for storing and sharing documents online securely. 

On 5G Services, she announced that one hundred labs for developing applications using 5G services will be set up in engineering institutions to realize a new range of opportunities, business models, and employment potential. Funds have been allotted for work on many key highways. 

Naturally, the creation of infrastructure across the country and development of location-agnostic tech platforms come as a big boost for startups in India's countless small towns and villages.