India’s space budget for the fiscal year 2024 has become a focal point of attention, with the success of Chandraayan 3 last year, the country continues its ambitious journey to establish itself as a global space power. The funding allocated to the Department of Space, encompassing the Indian Space Research Organisation (ISRO), and the notable increase in support for private companies in the space sector has sparked discussions about the nation’s commitment to space exploration and innovation.
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Recap of the 2023 Space Budget
In the preceding fiscal year, the Indian government allocated 12,543 crore rupees to the Department of Space. While this amount is slightly higher than the budget two years ago, it marks an 8 per cent decrease from the initially promised 13,700 crore rupees for the year. Notably, the government significantly increased support for N-SPACe, an organisation aiding private companies in the space domain, with a fourfold increase in funding.
Significance of the Allocations
Despite the reduction in the overall space budget, India remains a significant investor in its space program. The shift in focus towards supporting private companies is indicative of a strategic move to foster innovation and growth within the sector.
Challenges of Limited Funds
India has historically struggled with constrained space budgets, with its space spending as a percentage of GDP remaining relatively low. In comparison, the US allocates 0.28 per cent of its GDP to space, positioning India at seventh globally with a modest 0.04 per cent. However, ISRO’s ability to design cost-effective solutions, such as the SSLV rocket, has given India a competitive edge in the global launch industry.
Privatisation and Future Prospects
Under Prime Minister Modi’s directives, India has been encouraging private investments in the space sector, aiming to increase its share of the global satellite launch market fivefold within the next decade. The recent policy changes have already attracted interest from 20 companies for bids to build small satellite launch rockets. While this diversification may reduce dependence on government funding, it is crucial to balance financial independence with maintaining ISRO’s cost advantage.
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Industry Recommendations for 2024-25 Union Budget
The Indian Space Association, representing private space companies, has proposed recommendations for the upcoming Union Budget. Key suggestions include expanding GST exemptions, providing tax holidays, and concessions on customs duties. The association emphasises the need for clarity on FDI policies, production-linked incentives, and subsidies to boost manufacturing, investments, and innovation in the private space industry.
Vision for the Future
The 10-year vision outlined by IN-SPACe targets a $44 billion space economy by 2033. The association believes that implementing recommended measures will not only spur economic growth but also position India as an attractive investment destination in the global space arena.
As per a press release, Lieutenant General Anil Kumar Bhatt (retired), Director General of the Indian Space Association, urged the government to develop a comprehensive regulatory framework and address fiscal challenges to drive the growth of private space enterprises.
“We welcome the government’s recent reforms and its groundbreaking initiative to allocate satellite spectrum through an administrative approach. These initiatives undoubtedly have the potential to boost the nascent private space industry in India. Now, to propel this promising industry and drive innovation, it is crucial for the government for the development of a comprehensive regulatory framework and address existing fiscal and taxation challenges. We urge the government to consider our recommendations for incentivising the growth of private space enterprises. By leveraging the momentum provided by the Government and its visionary policy, these enterprises can deliver significant socio-economic benefits to the nation,” he said.
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As the space industry evolves, India’s commitment to balancing financial prudence and technological advancement will play a crucial role in determining its trajectory as a global space leader. The unveiling of the Union Budget 2024-25 will be closely watched by stakeholders in the space sector for signals on the nation’s future in space exploration and technology.
