Budget 2023 expectations: What does the Indian metaverse space seek from the policymakers?

Metaverse has been a buzzword these days, with majority of the top tech companies foraying into this new-age space. Will the Budget 2023 make any impact to the metaverse world, lets see what experts have to say.

By Jasmine Anand:

Of late, the metaverse has been making headlines as people are becoming allured by immersive experiences. Metaverse has stormed the internet and has opened means of profit and investment for everyone, including manufacturing, retail and tech companies, and these businesses are thinking about how to prepare themselves for this new technology. According to reports, the global metaverse market is likely to touch around $1.3 trillion by 2030, i.e., growing at a CAGR of 44.5 percent between 2023 to 2030.

Renowned companies like Flipkart, Maruti Suzuki, Tanishq, Mahindra & Mahindra, and MakeMyTrip, etc. have ventured into the metaverse space and are paving the road to the digital future.

Further, as more and more companies are venturing into this new-age tech space, people from the tech world are pondering what the Budget 2023 will hold for the metaverse space. Experts from the tech field are confident that this upcoming union budget has the potential to foster regulatory measures for the Web3 world and related technologies.

In fact, tech experts have certain expectations from Finance Minister Nirmala Sitharaman’s Union Budget 2023.

Mr Yuvraj Krishan Sharma, Co-Founder & CPO Edverse, a metaverse-based educational firm, is of the opinion that the government should take steps to help the Indian metaverse companies overcome the barriers of affordability, regulatory uncertainty, safety, and security in the metaverse space.

He further added, “The current taxation scheme for virtual assets, such as cryptos and NFTs, is not well-defined, thereby creating uncertainty for companies operating in the metaverse. This lack of clear guidelines makes it difficult for companies to understand their tax obligations and creates additional compliance burdens. Moreover, it doesn’t consider the unique characteristics of virtual assets, such as their ability to be traded or used in different virtual worlds, which can further complicate the process of determining their value for tax purposes.”

He calls for an overall, clearer, and more flexible tax scheme for virtual assets which would likely benefit companies operating in the metaverse and the metaverse industry as a whole.

Hopes for a constructive regulatory framework for the metaverse world

As the government emphasises the promotion of manufacturing, consumption & export of ‘Make In India’ products, the Indian metaverse industry is hopeful that the authorities will further strengthen their regulatory layout in favour of the upcoming emerging tech.

In the words of Vikram R Singh, Founder and CEO, Antier, which is a blockchain development firm, “The Union Budget should take decisive steps to drive India into the next phase of the Web3 economy by promoting internet-enabled disruptive technologies like blockchain, metaverse, NFTs and DeFi. The answer lies in encouraging the mass adoption of new-age digital technologies and attracting investments for startups in these domains by incentivising innovation through tax concessions.”

Singh further opines that the government should promote the growth of a digital ecosystem in India by launching more accelerator programs in partnership with leading companies, introducing web3 technologies as mainstream subjects in academic institutions, and setting aside ample funds to enhance technological capabilities to support, for instance, creator-led campaigns within the metaverse. We expect the Budget to make the most of the decentralisation of technology by creating a regulatory framework that supports tech startups and extending grants for cross-disciplinary research so as to commercialise disruptive technologies, minus the associated risks.

What do experts want for metaverse growth in the upcoming budget?

Following the trial run of the eRupee, industry experts are expecting that the Indian government would bring in more regulations for cryptocurrencies and related technology.

What can the Indian government do?

To help companies overcome the barriers of affordability, regulatory uncertainty, safety, and security, the government could consider providing targeted tax incentives and grants, as well as clarifying and streamlining regulations related to virtual assets and metaverse activities. The government should also emphasise mandating and investing in skill development, providing training, exploring the possibilities of the metaverse, and offering subsidies for EdTech startups in areas such as research and development, etc.

Emerging technologies like cryptos, blockchain, and Web3 are rapidly gaining traction across the world. Since the metaverse is closely related to this space and is highly valued by several tech giants, the future of the country will be driven by this next-gen technology. So, as businesses and start-ups are ready to take a dip in the vast pool of the immersive experience, all eyes are set on how the country’s policy makers would formulate constructive reforms in order to help this sector bloom.