Budget 2016: Tech-Savvy SMBs See Gain
The Government of India’s Union Budget 2016 has offered tax exemptions for small business units with a turnover of up to Rs 2 crore (up from the earlier exemption limit of 1 crore). The SMB segment believes this will act as a stimulus for these units to expand their business.
Indian SMBs feel the need to keep up with the technological progress in their industry to adhere to global standards. However, these SMBs are unable to bear the financial burden of additional investments in technology and therefore the recent move seems to be a welcome change.
AMI-Partners’ India Small and Medium Business ICT & Cloud Services Tracker Overview shows restricted cash flow, tightened credit lines and lower revenues are the major business challenges faced by India SMBs today.
In addition, to boost economic growth and employment a 100% deduction of profits for 3 out of 5 years for start-ups, for the period from April 2016 to March 2019 has also been announced. “This has created a positive impact. Close to 60% of SMBs report anticipating an increase in their IT spending up to 9% in the coming quarters.” commented Partha Sarathi Sengupta, AVP at AMI-Partners.
Spurred by the ‘Digital India’ revolution, the SMB sector is poised to act as a catalyst to bring about socio-economic transformation. “It is significant that most start ups are digital-based and usage of social media is rapidly on the rise among SMBs” added Sengupta.
Encouragement by the Union Government in terms of initiatives such as the presumption taxation scheme, skilling India, MUDRA scheme and service tax exemptions combined with initiatives taken by corporate to boost digitization, can be a game changer.
Indian IT companies will benefit from 2016 budget that will help the government implement its flagship Digital India program. The initiative will pave the way for IT giants to work with both the government and private sector.
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