Union Budget 2024: Onwards and Upwards for Space Economy The country, in recent times, has made exponential growth in the space race with Chandrayaan2, Chandrayaan-3, and Aditya-L1
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India's figure of space start-ups has grown from just one in 2014 to 189 in 2023 as per DPIIT Start-Up India Portal. In December 2023, Dr. Jitendra Singh, the Union Minister of State (Independent Charge) Science & Technology; MoS PMO, Personnel, Public Grievances, Pensions, Atomic Energy and Space, shared that the current size of the Indian Space Economy was estimated around USD 8.4 billion (around two-three per cent of global space economy).
The aim is to become a USD 44 billion valued Indian space economy by the year 2033.
Aligning with the aim, during the Union Budget 2024-2025 presentation, Finance Minister Nirmala Sitharaman made a few key announcements pertaining to the industry. "With our continued emphasis on expanding the space economy by five times in the next 10 years, a venture capital fund of INR 1,000 crore will be set up," she said.
Notably, it was the first Budget by the BJP-led NDA government since its re-election in June.
The country, in recent times, has made exponential growth in the space race with Chandrayaan2, Chandrayaan-3, and Aditya-L1. Indian Space Research Organisation (ISRO) has led the way with 124 spacecraft missions, 432 foreign satellite launches, and 98 launch missions.
"Presently, India has 55 active space assets which include 18 communication satellites, nine navigation satellites, five scientific satellites, three Meteorological Satellites, and 20 Earth Observation satellites," noted the Economic Survey 2023-24 released on Monday.
A welcome move
"Wonderful news for all of us in the sector. This will help larger players emerge out of India's space startup ecosystem. This also shows that the Government is continuing to strongly back its vision of making India have a larger chunk of the global space economy," said Srinath Ravichandran, Co-Founder and CEO, Agnikul Cosmos.
"The government's steadfast dedication to fostering industrial growth and innovation stands poised to catalyze economic resurgence and job creation on an unprecedented scale. We look forward to this year's agenda reinforcing our economic resilience while setting a robust foundation for sustainable progress and prosperity in #AmritKaal," said Captain Nikunj Parashar, Co-Founder & CEO of Sagar Defence Engineering Pvt. Ltd.
"I am confident that these funds will enable startups to attract talent, establish local facilities, and develop export potential for the next decade. As the Indian economy and startup ecosystem, particularly the NewSpace sector, continue to grow, the consistent revenue generation and performance of space tech startups will be vital in reinforcing the Government's confidence in the Indian NewSpace ecosystem," said Arpan Sahoo, Co-founder and Chief Operating Officer, KaleidEO.
While the announced fund will lessen the capital burden on the startups and other players, certain issues lie ahead. "The allocation of a dedicated fund for space technology in the Union Budget 2024 is a welcome move. However, the real challenge lies in the evaluation criteria used by investors, who often focus on incremental improvements to existing technologies rather than backing disruptive or first-time innovations. To truly support the growth of the space tech sector, the government should consider showing interest by signing Letters of Intent (LOI) to become customers of space tech startups, especially in the early stages when the product is being developed. This would enable BIZ Experiencess to raise capital from private investors more easily," said Ronak Kumar Samantray, Founder, TakeMe2Space.
