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Key Provisions Made Out of Union Budget 2022

The Union Budget of 2022 will give a major thrust to Data Centers, with the Government giving Infrastructure Status to this sector. The Budget also emphasizes various initiatives & plans that will result in further growth & profitability of the Indian Data Center market.

Major thrust to digitization and data centers

Companies like ESDS to benefit from reduction in cost of capital & operating costs, enhanced cloud and digital adoption across agriculture, banking, MSME’s, Government sectors, easier capital availability etc.

Union Budget 2022 to further enhance growth & profitability for ESDS (1/2)

Infrastructure Status to Data Centers:

Data centres being awarded an infrastructure status will be a major thrust to data localization. This initiative would reduce the cost of capital and enhance credit availability for data centers and cloud industry. Overall, would improve the profitability of cloud and data center service providers.

Digital transformation push in MSME’s:

The Government has also allocated INR 50,000 crore equity infusion in MSMEs which will further strengthen their digital transformation journey.

Agriculture Digitization Initiatives:

The government will commit investments to enable affordable broadband and mobile services in rural and remote areas. This will enable commercialization of agri & farmer focused technologies/solutions. [Key ESDS offering: Famrut]

Increased data generation bodes well for the cloud/digital infrastructure companies:

Open platform for the national digital health ecosystem, introduction of core banking in post offices, digital ecosystem for skilling and livelihood will push technology adoption across government, private and consumer segments. It is proposed to set up 75 digital banking units (DBUs) in 75 districts of the country by Scheduled Commercial Banks.

Union Budget 2022 to further enhance growth & profitability for ESDS (2/2)

Digital first initiatives in Government Departments:

Digital-first budget philosophy that focuses on digitalization of ministries’ budgetary allocations will ensure across the board acceleration of public services & drive digitization and enhance data center requirements. [Key ESDS SaaS offering: IPaas]

Focus on energy storage systems enhances power procurement options & reduces costs:

Infrastructure status as well as other regulatory incentives for setting up energy storage systems will diversify power procurement choices for the cloud and data center industry and is likely to reduce electricity procurement costs.

Plan to make India a global data center hub:

It was earlier reported that the Government has drawn up an ambitious scheme to give incentives to the tune of about Rs.12,000 crore to companies to set up data centers in the country. Government is planning to dole out between 3-4% of capital investment as incentive to companies along with other benefits such as real estate support and fasterclearances. This is part of the Government’s vision to make India a global data center hub.

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