India just got real about its data-localisation plans.

The country will soon bring out a policy to allow private companies to build data-centre parks, finance minister Nirmala Sitharaman said in her annual budget speech today (Feb. 1).

“It is now a cliché—’data is the new oil’—and it is true that analytics, fintech, and internet of things (IoT) are changing the way we deal with our lives,” Sitharaman said. “To take advantage of this, I propose to bring out soon a policy to enable (the) private sector to build data centre parks throughout the country. It will enable our firms to skilfully incorporate data in every step of their value chains.”

The proposed policy directly takes on a highly-debated clause in India’s personal data protection bill, which suggests that data collected by foreign companies such as Facebook, TikTok, and Google from the country must be stored on Indian servers. So far, the government’s proposal has been considered unrealistic given the lack of infrastructure.

Critics say the bill is deeply flawed. The US government and American companies have been pushing back, given how expensive and arduous the process is poised to be. Yet, in December, the Narendra Modi government approved the bill and it is set to appear in parliament soon.

The Indian tech ecosystem has welcomed Sitharaman’s recent announcement.

The move may also benefit India’s startup community. Data centres are key in “allowing to create incredible content and streamline and automate processes,” Apaksh Gupta, chief executive officer (CEO) of influencer marketing platform One Impression, said. For consumers, “it’s important that there be minimal latency when people are trying to consume content,” said Amit Doshi, founder and CEO of IVM Podcasts.

Sitharaman’s budget had several other announcements to cheer India’s tech community.

“’The setting up of data centric parks in our own jurisdiction will encourage innovation, the ease of accessibility, creation of jobs and in gaining competitive advantage in the era of globalization,” Maninder Bharadwaj, partner at Deloitte India, said. “The security aspects during this rapid technology transformation should be considered a vital component to protect the digital universe from cyber threats which eventually could compromise the envisaged growth.’’

Strong signal

The government has proposed an investment of Rs8,000 crore ($1.1 billion) over five years in its national mission on quantum technologies and applications.

“The new economy is based on innovations that disrupt established business models,” Sitharaman said. “Artificial intelligence, IoT, 3D printing, drones, DNA data storage, quantum computing, etc., are re-writing the world economic order…Quantum technology is opening up new frontiers in computing, communications, cybersecurity with wide-spread applications. It is expected that lots of commercial applications would emerge from theoretical constructs…developing in this area.”

Last year, the government showed support for tech advancements by setting up a national portal for artificial intelligence (AI) research and development.

“We appreciate the government’s emphasis on promoting cutting-edge technologies in India,” Atul Rai, co-founder of Gurgaon-based AI startup Staqu, told Quartz.

The government has also proposed an investment cell “to give investors free investment advisory, land banks and facilitate clearances even at (the) state level,” Sitharaman said. An online portal will be set up for the same.

Lokendra Ranawat, founder and CEO of online custom furniture store WoodenStreet, pointed out that the cell will help with the funding process and the government launching e-marketplaces will open various opportunities for budding businesses.

“This way entrepreneurs can focus on solving complex problems and business fundamentals, rather than getting embroiled in (a) complex business set up processes,” Ayushi Gudwani, founder of women’s workwear brand FableStreet, said. “However, the eventual success of this cell will be dependant on how effectively this gets implemented on the ground”

Staying connected

Beyond private businesses, “all public institutions should be provided with digital connectivity,” Sitharaman said, referring to anganwadis (rural child-care centres), health and wellness centres, government schools, public distribution system outlets, post offices, and police stations.

The budget has allocated Rs6,000 crore to the BharatNet scheme for 2020-21. It plans to bring fibre-to-the-home (FTTH) connectivity to 100,000 village councils this year itself.

While promising on paper—complete with 4,000 free movies—the government’s flagship scheme to provide last-mile internet connectivity in rural regions has been plagued by problems.

For starters, the initial deadline for connecting all 250,000 councils was March 2019, but only 118,000 had been connected by then. Of the 126,000 village councils made service-ready by January 2020, wi-fi hotspots are functional in a mere 15,000.

Some states like Andhra Pradesh, Jharkhand, Maharashtra, and Odisha, have spent up to 17% of the budget allotted to the project, but the number of service-ready councils has not even breached 1% of the total.