Bengaluru: With disruptive technologies like Artificial Intelligence (AI) driving businesses, the IT sector wants the Union Budget for fiscal 2020-21 to ensure greater use of these to spur a sluggish economy among other measures for the sector, industry experts said on Friday.

"The budget should announce a fund like Singapore's Temasek that will invest only in early-stage Indian AI start-ups and lower long-term capital gain's tax for investing in AI-based firms," digital intelligence firm Germin8 founder chief executive Ranjit Nair told IANS.

With the US and China racing ahead of India in AI research, AI entrepreneurship and government investment in AI, he said the budget should make it easier for start-ups to access capital, as they face an uphill task in early-stage funding.

"The government bring policies that encourage AI companies. Ease of doing business means less bureaucracy so that entrepreneurs can build solutions without distractions," he said.

AI is expected to have a huge impact not only in commerce, but also in health, national security, cybersecurity, food security, education and global warming.

"The government should announce AI challenges, which make academia and industry solve an important problem in the country. The state's role should give a crisp problem definition, provide access to data and provide a good cash prize," Nair said.

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Though thousands of engineering graduates pass out every year across the country, India is behind other nations in AI PhDs and AI research. Hence, the budget should allot more grants for AI research and offer incentives to institutes investing in AI training, he added.

Noting that IT was one of the few sectors that remained growth-driven despite the eonomic slowdown since the last fiscal, Cigniti Technologies chairman C.V. Subramanyam said the budget should give relief or reduce dividend distribution tax (DDT) for IT firms operating in the country.

Anti-virus leader Kaspersky's General Manager, South Asia, Dipesh Kaura said Dipesh Kaura said: "As the budget for the ensuing fiscal is crucial for businesses across the country, we are expecting higher allocations for cyber security from the government."

Investment in cyber security will accelerate the digital transformation. Funds should be spent on supporting skill development and training students keen to become cyber security professionals, he said.

"Cyber security awareness campaign for consumers should be a major focus of the budget," Kaura said in a statement.

Cybage Software chief executive Arun Nathani said the budget should take steps to roll back DDT across the board to attract FDI and incentivise the sector to ramp up the capex/opex spend once the demand is back.

"Rationalising the GST rates and compliance processes will outgrow the consumption rates. The Indian IT industry will welcome specific incentives likeAweighted deductions for investing in R&D of AI/BI technology tools to facilitate IT firms, companies, universities and research institutes," Nathani added.