JOIN USBy Gaurav Bali
The Government believes that artificial intelligence (AI), deployed in different sectors can help us achieve the $5 trillion benchmark over the next five years. The statement comes from a recent Accenture report that said AI and Machine Learning have the potential to contribute nearly $1 trillion to the Indian economy by 2035. However, India’s National Policy on AI only focuses on the adoption of AI for social development and inclusive growth, and for the above to happen effectively, we need to have a few fundamental changes and forward-thinking policy frameworks in the Budget.
Special Corpus: The GOI has a major advantage in funding AI research, which the private sector and academia do not otherwise have access to their own. A good start would be to create a ‘special fund commitment’ towards AI research spending & we should conduct strategic planning across different departments of the Government, finding collaboration opportunities within the industry and academia. In tandem with the private sector, Government funding can provide sufficient incentive to invest in high-risk and long-term projects in a developing field such as AI. For instance, in the US, the Federal Government plans to spend almost $1 billion in non-defense related AI R&D in fiscal 2020. This demonstrates the intent of the US Government in promoting the field with the private sector and a similar direction should be undertaken by India.
Taxation Benefits: While the GOI has taken steps in the right direction to address the economic downturn (by slashing the corporate tax rate); the Government in the current budget should consider a multiplied pre-tax deduction of R&D expenses in the area of AI for enterprises. A good example of the same can be learned from China where the Government allows companies to deduct 150% (increased to 175% for medium and small-sized science and technology companies) of R&D expenses, or 250% of such expenses if they lead to an intangible knowledge product (patent, software, etc.), within the tax year in the calculation of taxable revenue. This will boost the risk-taking abilities of firms working in this field.
Subsidized Insurance: For hardware-based AI innovation in areas heavily focused on by the Government such as Smart cities, additional steps should be undertaken. The Government should subsidize the insurance premium paid by producers of the first batch of innovative technology equipment, to insure against quality or safety issues. This will also add to the confidence of early-stage startups working in this field to take more risks and will work well in conjunction with the taxation benefits suggested above.
Shortage of Talented Workforce: Similar to existing supply/demand gaps in the US & China, India too faces a huge dearth for a talented workforce. According to NASSCOM, India faces a talent gap of more than 1,40,000 workers in AI & Big data Analytics by 2021. The budget should have a special emphasis on curriculum development and workforce training as an urgent R&D need. This should begin much earlier than college-level graduate courses. In addition, to keep the ecosystem of innovation that underpins India’s leadership in AI functional, the Government must incentivize Research universities, to turn faculty research into commercial success. Technology Transfer courses must designate funds specifically for university start-up projects. The Government should encourage additional roles for universities as innovation ecosystems for early-stage startups.
(Founder & CEO, AmyGB.ai -- an AI startup)