Post Budget 2017 Reactions by IT Industry Experts

by February 2, 2017 0 comments

Yesterday we all heard to our union finance minister Arun Jaitley, he presented the budget 2017 -18 which brings the smile to lots of faces, however, a few of them are still not happy. With the evoked diverse reactions from different industry’ leaders and experts, we have gathered all the reactions at one place.

Here are some of the reactions; have a look…

Mr. J. A. Chowdary, Advisor IT & Special Chief Secretary to Chief Minister, Government of Andhra Pradesh
The transformative potential of Union Budget 2017 is enormous. Thanks to the initiatives proposed in the Budget, next-generation Knowledge Service Hubs such as Fintech Valley, Andhra Pradesh can emerge as growth magnets and growth drivers for the Indian economy. The thrust provided to digital transactions will propel the Fintech sector forward; when combined with other initiatives that support tax compliance, digital infrastructure or even rural electrification – the overall outcomes for India can be transformative, to say the least. I am confident that the next-generation knowledge service hubs will also become the hubs for ideas and innovation, while attracting skills, capital and academic institutions documenting, researching, furthering and spreading the knowledge that is created. For us at Fintech Valley, Vizag, it is inspiring to contribute to the realization of such a future, which we are committed to!

 

NASSCOM’s statement on Union Budget 2017
The Budget presented today reinforces Government’s reliance on technology for achieving development goals, as it focuses on Infrastructure and empowering startups and SMEs, although IT industry expectations on facilitative proposals remain largely unmet.

The budget evangelizes digital payments and infrastructure, along with promoting a transparent business environment. It is also promising that the Government is dedicated to “change the colour of money” on the back of tax reforms, political funding, digital transactions and policies that dis-incentivise the use of cash for high value transactions.

The Technology sector sees many emerging opportunities arising out of Govt. reliance on Technology driven development like initiatives like SWAYAM, separate policy for Metro with focus on indigenisation, Pension platform for defence, Digi Gaon etc.

Medium and Small Enterprises occupy bulk of economic activities. Government’s encouragement to SIDBI to refinance credit institutions providing unsecured loans, at reasonable interest rates, basis transaction history, should benefit Technology sector where tangible collaterals are difficult to offer.

The continued focus on digital payments is as per expectations. We welcome the Govt’s announcements of setting up the Payments regulation board and the intention to undertake a comprehensive evaluation of the Payments and Settlement Systems Act. Related and maybe more important is the security aspect and setting up of CERT for financial transactions needs to be expedited, to maintain momentum as India transits into ‘less cash’ economy.

Reinforcement of Government’s intent to rationalise and simplify regulations and in particular labor laws will have far reaching effect in ease of doing business and protecting employee interest. For the IT sector, which did not exist at the time when applicable legislations were framed, such an initiative holds promise and NASSCOM will work with Industry and Central and State Government to develop streamlined regulations for the sector.

For the IT sector, leading the start-up journey, extending the time period for eligibility for the 3 year income tax exemption, from 5 years to 7 years will allow for startups to actually avail the benefit, as most startups do not make profits in the initial years of their operations. Govt support for investments and scaling up, by allowing carry forward of losses even if stakes are diluted beyond the stipulated 51%, subject to safeguards, was part of several recommendations from NASSCOM on strengthening the start-up ecosystem. However, other equally critical recommendations related to harnessing domestic investors and removal of angel tax have not been accepted.
TDS on payments to call centres have been reduced from 10% to 2%. This will improve working capital available with call center companies and potentially support cos in their expansion to Tier 2/3 locations, However, this is possibly the only IT sector focussed announcement in the budget. Several Industry recommendations to help sustain and grow global competitiveness of the sector like support for Research, development and innovation, rationalising safe harbour margins to more realistic levels and roadmap for corporate tax reduction have not seen place in the Budget 2015-16.

 

Rajesh Gopinathan, CFO and VP, TCS
“The Union Budget 2017-18 focuses on Inclusion, Transparency, Fiscal Responsibility and gives a big push to the Digital economy. It encourages a shift to digital platforms with incentives to payers as well as merchants driving convenience, efficiency and transparency. An increased allocation to BharatNet will bring high speed broadband connectivity to more than 1,50,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. The proposed DigiGaon initiative to provide telemedicine, education and skills through digital technology will increase empowerment.”

 

Anant Maheshwari, President, Microsoft India
The Finance Minister has presented a balanced budget, underlined by the continued push to using technology to aid a digital economy. As India strengthens its position on the global map, the need for skilled youth is crucial. The budget’s focus on extending market relevant training for the youth and setting up 100 international skill centers across the country, is a positive move. The emphasis on science and technology for students, and launch of SWAYAM, will further empower India’s youth for the future. I am glad to witness the increasing focus on cybersecurity, which is critical to securing the economy’s digital transformation. The reduction of corporate tax for MSMEs is a welcome move and will boost the economic growth. The momentum in the implementation of GST is promising and I look forward to seeing it unfold in the coming months.

 

Debjani Ghosh, ‎Vice President, Sales and Marketing Group, Managing Director, South Asia
“Budget 2017 demonstrates the government’s continued push towards making India a digital and a knowledge economy. It has integrated the effective use of technology across all ten strategic themes called out by the FM and focusses on digitization with greater spending in agriculture, rural areas, infrastructure and poverty alleviation. While it continues to build on the government’s efforts of fiscal consolidation with economic reforms, higher investments and growth at its core, we are disappointed with the lack of provisions for creating a robust domestic electronics manufacturing ecosystem in India beyond smartphones. I strongly urge the government to re-consider this as the absence of a robust electronics manufacturing ecosystem will only restrain the ambitious Make in India and Digital India Vision.”

 

Harsh Marwah, Country Manager, Verizon Enterprise Solutions

In recent years, the Indian Government has made consistent efforts and undertaken initiatives to foster the growth and development of the Indian IT sector, which has enabled the sector to lead the economic and the digital transformation of the country. The ecommendations in the structural reforms for digital payments is a positive step towards recognizing the importance of the thriving digital payments sector. Increased investments for the growth of the digital economy will usher in a knock on effect on additional transformational development in India. It is additionally heartening to see the Government’s plans to develop a CERT team to tackle the increasing threat of cybercrime in the BFSI space. It demonstrates how cyber security is increasingly becoming an integral part of the Government’s national agenda. Secure digital infrastructure and network will be essential for the acceleration of the Digital India ovement. It will also encourage adoption of e-banking and e-payments on a regular basis.

Moving forward we continue to see additional scope on additional IT reforms including undertaking measures for the reduction in the service tax for enterprises. This is exactly what India needs to do if it is to attract investment, stimulate innovation, and ultimately stake its claim on a share of the global digital economy.

Overall, it was a well thought and far-sighted budget.

 

Mr. Kuldeep Malik, Country head – Corporate Sales International, MediaTek India
“We were expecting Financial Budget 2017 to offer incentives to start inflow towards design led manufacturing in place of assembly led manufacturing ecosystem, but it seems government not yet convinced towards adopting multiple layered incentives for localization while increasing the duties on CBU (Completely built Units), overall based on the information available from the budget the impact of the policies seems to be neutral for mobile/tablet industry, at best.

There has been a 2% increase in duties levied on import of PCBA in India, which still will reflect only on one part of the manufacturing cycle with focus on assembly of mobile handsets. On the other hand, providing attractive incentives for localization of design and R&D capabilities would have bolstered the ‘Make in India’ initiative, and driven more handset makers to introduce design led manufacturing in India.

Post demonetization government seems to be totally convinced towards digital payment adoption, and there is one key development towards ‘Digital India’ program, where Government has decided to waive all duties (SAD/CVD, BCD) levied on mPOS systems, which in turn means that the POS devices will become cheaper and hence we can expect the adoption of such devices, even in grass root level, to grow exponentially in the coming year, helping drive forward the mobile payments ecosystem.” Considering the adoption of Aadhar based payment government has also waived of duties from components such as IRIS scanner, fingerprint readers.”

 

Sriram S, Co-Founder and Director at iValue InfoSolutions
“We will call it a balanced budget, which will drive growth with prudence and addressing needs of the poor. The major thrust on Capex growth of 25% should drive demand. The focus on infrastructure and rural areas are welcoming.

As the digitization was one of the core area for this post demonetization budget the promotion of BHIM app and plan for Aadhar based payment without mobile is an appreciable initiative. Also, limiting the cash transactions to 3L is a good step which could have been pegged at 1L. The 25% corporate tax cap for companies up to 50Cr revenue is a great step which will benefit more than 90% Indian firms. 50% personal tax reduction for 2L to 5L slab should help the emerging class.

We did not hear much on cyber security with a greater push on the digital transaction, but for the creation of CERT. We still think a lot more focus is required on this front.”

Shibu Paul, Regional Director (IN, GCC & SEA ) at Array Networks
“I am overall happy with the budget, the increased focus on cashless economy and move towards digitization is very much appreciable. I will call it a forward looking budget with the balanced Tax soaps, IT rebates, focus on rural areas and SME development. Also, the reduction in tax for companies with less than 50cr turnover which will now be placed at 25% is a big win for MSME sector and around 96% of the companies will be benefitted by this major announcement.”

Ravi Raj, Brand Head, Director Sales & Support at NetRack
“This is overall a positive budget, which constitutes the entire element required for a progressive economy. This budget is an extension of the initiatives like digital India and make in India. The focus on infrastructure is a big push for industries, also the supporting schemes to push digitization like installing of POS machines, BHIM app, Aadhar payments as well as initiatives on digital transactions will help grow Indian economy. Apart from this, the tax reduction for companies with less than 50cr turnovers is the biggest take away for SME sector from this budget. We are hopeful for early implementation of GST, which will facilitate smooth movement of goods across India.”

Anoop Pai Dhungat, CMD at Galaxy Office Automation
“Budget 2017 has traversed along expected lines on issues such as GST, demonetization and payments digitization, outlay for infrastructure sector and more. However, could have certainly been more impactful.

For starters, although there are allocations for agriculture, transportation and rural housing, but budget 2017 fails to assuage concerns and challenges facing manufacturing and industrial sectors, technology or even the burgeoning Indian IT sector. Creating employment opportunities on a broader scale continues to remains a core need that could change nature of our entire consumption story.

Only silver lining I can see is tax incentives for MSMEs, and liberalization of FDI policy, details of which are yet to emerge. Overall, I would term this a disappointing budget.”

Rajarshi Bhattacharyya, Country Head at SUSE
“We appreciate the budget announcements and schemes launched under the union budget 2017-18. Overall, it is a balanced and growth centric budget that will drive our country to the brighter side. We respect the decision of addressing basic needs of farmers and bringing employment/job opportunities for our youths, who are pillar of the future. Focus on the infrastructure and rural areas are welcoming decisions. It encourages Infrastructure growth and will provide the perfect launch pad towards India becoming more IT consuming country

The encouragement given to start ups and tax reduction to MSME is a positive step towards make in India initiative. This will ensure new age organisations to be more globally competitive. India’s GDP will be on the upsurge. The 25% corporate tax cap for companies up to 50Cr revenue is a great step for MSME sector, which will positively benefit more than 90% Indian firms. 50% personal tax reduction for 2L to 5L slab will certainly help the emerging class.

Giving assurance that the effects of demonetization will not spill over to the next fiscal rather will lead to higher GDP growth is what the public were expecting. The only point we feel was missed or I rather say requires major attention from the Government is Cyber security. We will look forward for some policies or schemes which can assure secured digital transactions.”

 

Mr. Aniketh Jain, CEO & Co-Founder of SOLUTIONS INFINI

‘The union budget is perfectly balanced to speed up the business growth of start-up sector in Indian economy. We welcome the proposition of 25% tax for companies having less than 50 crore turnover in a year. Though there were some expectations regarding removal of MAT but our finance minster has allowed the companies to carry forward of MAT from 15 years as against 10 years is also a great move taken by them.This provides the companies an additional five years before they become liable to pay their MAT. There are many immense moves taken by finance mister like extension of 7 years holiday tax from 3 years for start-ups to encourage their entrepreneurship in coming years. This helps to boosts the entrepreneurs and generates maximum profit for the business.’

 

 

L C Singh, Vice Chairman & CEO (Founder) at Nihilent Technologies.
“The Narendra Modi led National Democratic Alliance government’s budget for 2017-18 has an special emphasis on enabling extensive transparent system of governance with providing more avenues for learning and development, through importance to building a huge digital infrastructure, which clearly indicates a wholehearted commitment to development of rural India.

By providing tax relief in HRA, the finance minister Arun Jaitley, has helped the public-at-large. The announcement of ‘Transform, Energise and Clean India’ is a sincere attempt to focus on transforming the quality of governance, energizing various sections of society – especially the youth – and more importantly, cleaning the system from the age-old diseases of: corruption, black money and non-transparent political funding, which is certainly a welcome move.

In addition to that, the promulgation of digital transactions to the tune of of Rs 2,500 crore across various platforms like: UPI, USSD, IMPS, Aadhaar Pay, debit cards, and tax exemptions on digital transaction equipments, referral bonus and cash-back not only for customers and merchants as well, in order to promote BHIM app, will not only boost the fast adoption of digital technologies across the country but it will, for sure, encourage means to reach out to consumers digitally and different markets. In a nutshell, it’s a balanced and realistic budget.”

 

Abdul G Sait, Co-founder & MD at Passion Connect
The overall announcements by the Hon’ble Finance Minister focuses holistic economic growth and digitalization in the country. As India strengthens its position on the global map, the need for skilled youth is crucial. Launch of a Rs 4,000 crore scheme, called Sankalp, for skill development and Emphasis on extending market relevant training for the youth and setting up 100 India International Skills Centres (IISC) across the country, are extremely positive moves.

For a startup like us, the budget does include certain good news. Carry forward of losses, tax break upto 7 years,Minimum Alternative Tax (MAT) changed from 5 to 15 years and Income tax benefit for MSME’s is a big relief. It is important for us to stay agile and upbeat with technological advancements and this budget is making it possible.

 

Mr. S. Durgaprasad, Co-Founder, Director & Chief Executive Officer of Bahwan CyberTek
The Union Budget for 2017-18 has a number of steps that are paving the way in making India a digital economy. With the first step of demonetization taken towards this promise, the budget has further highlighted steps in this direction; for example, Aadhar Pay, is a mandate to digitize all Government receipts and the restriction of cash transactions up to Rs. 3 lacs. This calls for robust technology players in the payments space that can help enable such an environment, in collaboration with the Government.
An interesting point to note here is that the budget has been presented with a fiscal deficit of 3.2%, which is expected, given the current global market scenario. Firstly, it is likely that there will be higher capital outflow from emerging economies like India, since the US Federal Reserve’s intention is to increase policy rates this year; secondly, the uncertainty around commodity prices – especially that of crude oil – is bound to have implications on the fiscal situation of emerging economics; finally, there are signs of withdrawal from the globalization of goods, services and people, as the pressure of protection on the global economy is unsurmountable.
Moreover, some key decisions taken by the Government will work in the favor of IT organizations. For instance, the abolishment of the Foreign Investment Promotion Board and further liberalization of the FDI policy are under consideration – this definitely means further investments in India.
What is definitely reassuring is the amount of measures taken to stimulate growth – Income Tax for companies falling under the MSME category with a turnover of up to 50 crore has been reduced to 25% and the MAT credit carry forward has been increased to 15 years versus 10 years.
Overall, this union budget is people friendly; with widened tax net for corporates and industries, and budget deficit control of 3.2%, this is a pro-industry budget, and the scope for technology companies for automation initiatives has vastly widened because of this.

 

Rakesh Desmukh, CEO & co-Founder, Indus OS
The Budget is an extremely promising one, and extremely pro digital economy. Several of the initiatives rolled out seek to include the masses into the ‘Digital’ India’ fold, making it possible for them to not only have the right technology to transact online, but also the right broadband infrastructure to provide Internet to data dark areas. Specific announcements and provisions like the target of Rs 2,500 crore digital transactions across platforms like UPI, AadharPay, IMPS, launch of AadharPay for merchants, and Aadhar-based smart cards for senior citizens, all encourage more Indians to come online and gives them more reason to transact online. Incentives to promote the use of BHIM app will make citizens more comfortable with mobile wallets, and we see all of these as providing a major boost to India’s move to digital.

As a Made in India operating system, Indus OS has been rapidly expanding its footprint across India. With the Govt’s effort towards digitizing the nation, smartphones will become a critical conduit to bring technology access to the common man. And as more Indians come online, there is a pressing need for smartphones to be designed to suit their unique needs, in their regional languages, and OS-led innovations will lead the way in seeing this vision through. We remain invested in the Govt’s efforts, and will continue to partner with the Govt. to bring newer innovations to the fore.

 

Mr. Pradeep David, General Manager, Universal Robots India
Investment in the electronic sector will be a powerful growth engine for Robotics companies in India. The budget plays well for our company as the Government is committed to ensuring Conducive labor environment / Legislative reform to simplify labor laws. We are the leading player globally providing collaborative robots (cobots) technology to all levels of industry. Our Robots safely work alongside humans, without any danger of getting hurt, and more as a “worker’s assistant” or “third arm” or “helping hand” or “portable tool” which traditional industrial robots cannot be used as.

Investment in the Electronics sector is sure to trigger an inspection and assembly related market for cobots after this announcement. Robotics in India has already made significant inroads in electronics assembly in the recent past and this announcement will be a powerful growth engine for Robotic companies. Apart from the investment the Government has announced in electronics, we would have liked to see some incentives for manufactures in their need to embrace Automation and Robotics to improve productivity & quality

 

Jatin Dalal, Chief Financial Officer, Wipro Limited
“I commend the Finance Minister for delivering a Budget that is a clear continuation of policy direction. The Budget’s focus on investments in infrastructure creation while easing private sector’s access to credit will generate jobs and increase productivity. The thrust on digital economy, deployment of analytics in tax administration and initiatives on cyber-security demonstrate the significance of Information Technology among Government’s priorities. Corporate India welcomes the initiatives to expand the tax base and eliminate evasion. While the targeted proposals on corporate taxation are welcome, progressive steps towards achieving competitive tax rates could have attracted global investors.”

 

Rajiv Bhalla, Managing Director, Barco India
We appreciate the deep-rooted changes introduced in the Union Budget 2017. The budget further reflects the commitments of the Indian Government to truly promote digitalization in the country. This includes allocating Rs 10,000 crore for Bharat Net Project which is dedicated to extending high-speed broadband, Wi-Fi hotspots and Fiber Optic network in India, especially to the rural landscapes, Gram Panchayats and more. Manufacturers of tech and electronic products will also receive a boost, following the announcement of Rs 745 crore funds allocation for the same. When viewed in the light of the upcoming GST bill, the entire budget caters to the unique needs of promoting digitalization in an emerging market. Besides, the boost to digitalization is well supported with a host of infrastructural overhauls as well. We appreciate an allocation of Rs 2,41387 crores for transforming the transportation sector, including ships, rails, and roads. Railways further have a development expenditure of Rs 1,31,000 crores, out of which, the government will be providing Rs 55,000 crores. These changes are going to have a transformational effect, positively influencing the advent of Smart Cities in India.

 

Dr. Rishi Bhatnagar, President, Aeris
“Overall a very positive budget. Reduction of corporate tax rates from 30% to 25% for MSME firms will definitely encourage investors and corporates. Some of the steps taken will definitely increase foreign direct investment and lead to employment generation which will be good for country.”

 

Mr. Manish Sharma, President & CEO, Panasonic India & South Asia, and Executive Officer, Panasonic Corporation
“The Union Budget 2017 will have a long term impact, it needs to be analyzed further when it comes to the appliances and consumer electronics industry. This budget, a lot of impetus has gone to rural economy and allocation on infrastructure by the honorable finance minister. From a consumer electronic company point of view we were expecting direction on the upliftment in supply chain and logistics in India. The budget allocated towards MSIPs and EPF looks progressive and will surely reduce dependency on imports in the industry.
We look forward to the next draft of GST to come forward, however the government’s move on imposing a 2% special additional duty on populated printed circuit boards (PCB) used for mobile phones imported into the country, will provide adequate protection to the domestic industry and give the necessary impetus to Make-in-India under the GST regime.”

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