Budget 2017: What Tech Leaders Are Saying
The Union Budget 2017 presented by Arun Jaitley in the Parliament on Wednesday had a strong focus on digitization, driving towards developing infrastructure and bringing rural India to the forefront. As the expectations of the IT industry were soaring high, here’s what some of India’s leading technology leaders from across segments such as IT-ITes, manufacturing, fintech, e-commerce and startups said on the Budget announcement and how it would impact the tech industry on the whole.
IT-ITeS sector: Towards a digital economy
“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.” - Anant Maheshwari, President, Microsoft India
“The strong emphasis laid on technology in almost all the development areas in the budget reaffirms that technology has been at the forefront of India’s recent economic growth and digital transformation. It has been recognized as an important enabler across initiatives ranging from agriculture to skill development to manufacturing and infrastructural development. The Government’s focus on making India a digital payment economy will definitely help companies like HP to contribute in technology adoption in rural and semi-urban areas, thereby bringing the Digital India’ vision closer to reality. We also welcome the Finance Minister’s commitment to introduce and implement Goods and Services Tax (GST) as per schedule and start GST awareness program from April 1, 2017 for all stakeholders.” - Rajiv Srivastava, MD, HP India
“The IT industry is buoyed by this path breaking budget which takes another major step towards a complete digital economy. The Bharat Net project spend is being stepped up to Rs 10,000 crore to make high-speed broadband on optical fibre available in over 1.5 lakh gram panchayats with hotspots. IT Infrastructure investments will see a substantial increase in rural India and as a leading security vendor we will focus on this new emerging market. Aadhar based smart cards are being introduced for senior citizens to capture health details and 350 online process are being setup for students, all these initiatives needs the government to develop a strong security framework to protect sensitive information.
A strong public-private partnership with a security provider is essential for the government to safeguard the emerging Digital India. The partner can provide up-to-date information and threat intelligence to the IT staff, as well as define an escalation path when an incident is detected. Government agencies should also proactively partner cyber security organisations and solution providers to share threat information, so that collectively, the industry can have a more comprehensive view of the Indian cyber landscape to protect the new initiatives planned in this budget.” - Rajesh Maurya, Regional Director, India & SAARC, Fortinet
”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 countr.
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.” - Rajarshi Bhattacharyya, Country Head, SUSE
“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.” - Jatin Dalal, Chief Financial Officer, Wipro Limited.
Read more: Union Budget 2017: Here’s How Analysts React
“Several measures introduced in the 2017 Union Budget are an important step towards building India into an important digital economy. This budget has made special provisions to ensure greater financial growth, with emphasis on enhancing cybersecurity in finance, and bringing greater coordination and transparency between departments. The Computer Emergency Response Scheme is a great initiative which will smoothen coordination between finance regulators. The push to drive adoption of mobile and an Aadhaar-enabled payment system will help bring in greater financial inclusion amongst citizens. Additionally, IT exemption for start-ups will help reduce income tax for smaller companies with a turnover less than INR 50 crore, which we believe will significantly improve the ease of doing business for smaller businesses and start-ups in India. There has also been a revision in personal income tax rates which will boost consumption to some extent. - Rostow Ravanan, CEO and MD, Mindtree
“The Budget 2017-18 theme is to Transform, Energise and Clean India and every citizen to my mind will agree with this theme. The focus on both physical and digital infrastructure build out continues and there are clear milestones stated in the budget for instance that 150,000 Gram Panchayats will have Broadband connectivity by end of 2017-18 and these will be used to provide tele medicine & education is laudable. This is not a populist budget, but a budget which caters sensibly to the poor, youth, farmers, villages and infrastructure to propel India further every year. Demonetisation was a bold move and so is the move to bring in transparency in electoral funding as announced in this budget.” Anil Valluri, President, NetApp India & SAARC
“The goal to create a smarter digital infrastructure pan India continues with the allocation of Rs 10,000 crore for BharatNet. This is a major step towards delivering high-speed, last-mile connectivity at the grass root level through optical fibre in 1,50,000 gram panchayats by the end of 2017-18. With the FM focusing on mobile broadband, rural broadband and Digital India for the benefit of people living in rural, remote and urban areas, we anticipate a strong push to build broadband highways in the country. This is another step towards the realisation of the ‘Broadband for All’ vision, and will bring true broadband experience to the masses. With this, we look forward to exponential growth in smarter digital infrastructure through large-scale fibre network deployments in the country.” - Anand Agarwal, CEO, Sterlite Technologies
“Budget 2017 highlights the government’s focus on enforcing greater transparency and accountability with a clear attempt being made to widen the tax base. Finance Minister Arun Jaitley made several references to using data mining to improve the efficiency of the various tax departments specifically with regards to transforming India from a cash driven to a digital economy using new measures such as Aadhaar Pay. This is a step in the right direction which will have a relevant impact in widening the tax base and make India fiscally stronger and have a positive impact on national growth and development.” - Sunil Jose, Managing Director, Teradata India
“ One key take away from the Union Budget is that technology will continue to play a pivotal role in governance as well as the ecosystem of the nation. Overall, the budget is well balanced and new initiatives such as SWAYAM, imparting education on foreign languages under Skill India, AADHAR enabled payments, augur well in skill development and digitalisation. On direct tax front, extending period of MAT credit, additional favourable measures for start-ups to foster innovation, concessional tax rate for Small and Medium Enterprises, are all welcome moves.” - Sanjay Jalona, MD & CEO – L&T Infotech
Telecom/Smartphones: Boost to local manufacturing?
“In the direction of making India a Digital nation a needful decision was made, with the focus rightly on digital India the budget also gave boost to telecom and manufacturing sector through Digital India. Modernization is good for any nation, for a successful and powerful nation fast growth can only be reached with the help of technology. Those portions of India that are deprived from the fruits of technology will now be able to enjoy it. Government’s mission to connect 1,50,000 gram panchayats with hotspots and digitization will increase the use of technology and will create a friendly environment for digital payment system. No doubt Smartphone will play a crucial role in strengthening Indian economy. In today’s world technology and smartphones go hand in hand this step will lead to more demand of smartphones and will create the a wide spectrum for smartphones companies to compete for and to deliver.” - Sanjeev Bhatia, CEO of Zopo India and Managing Director of Adcom.
“The focus on digitisation and reforms on restricting cash spending is an important step towards making India a digital economy. Smartphones play a very crucial role in enabling digital payments and Micromax feels this they will be able to facilitate and contribute to this strategic national initiative in a big way through their wide range of phones and the customer reach they enjoy through their distribution network. . Also we feel that there will be a specific focus on the low and mid-price smartphones capturing a fair share of the market.
The government has also acknowledged the need to bring down lending rates to ensure cheaper funds for both industry as well as consumers and we hope GST will be able to address that. It is heartening is that the government has announced multiple measures which can improve local manufacturing and create a better component ecosystem for mobile handset makers. The allocation of Rs 745 crore is a welcome move which will provide impetus to local component manufacturing in the electronics sector. ”Make in India” is a great opportunity given India has attracted huge investments in local manufacturing lately not only benefitting the economic growth but also creating increased employment. The investment of Rs. 10,000 crore towards that aim will definitely be beneficial to further grow local manufacturing. At Micromax we are committed to support the Make in India initiative and invest accordingly. - Rajesh Agarwal, Co-Founder, Micromax Informatics
“We are positive, that the Government’s increased allocation and incentives in schemes like M-SIPS and EDF will provide the necessary push to the mobile and internet manufacturing economy . Also the allocation of INR 10,000 crore in BharatNet provides the much needed boost for the penetration of Digital India into the rural segment, and for strengthening the consumptions of smartphones” - Arvind R Vohra, Country CEO & MD, Gionee India
“The budget gave the smartphone industry a lot to look forward to in the coming year. Government’s thrust on digitization through its push on Aadhaar-enabled payments will provide impetus to the demand of mobile phones in the country. The BHIM app has already been adopted by 125 lakh people and government’s plans to introduce two new schemes to promote its use will make the concept of a cashless society and digital currency, a reality. In addition to this, proposed extension of the OFC network to 1,50,000 gram panchayats for high speed broadband connectivity and rollout of 4G in the country will create a more digitally inclusive society. The budget was also conducive to promoting domestic manufacturing of electronics. With a provision of INR 745 crores in 2017-18 in incentive schemes like M-SIPS and EDF, manufacturing of smartphones in India should see a boost. We now look forward to the successful rollout of GST this year. Besides achieving standardization of taxation levels and making interstate movement of goods easier, it should also help sellers achieve similar selling prices. This coupled with all the other initiatives will enable us to bring more people under the digital umbrella.” - Peter Chang, Region Head – South Asia & Country Manager for ASUS India
“This is a very marginal increase and will have NO impact on the consumer for two main reasons: First, the increase is so miniscule that Brands will absorb this impact and will not pass it on to the consumer. Second, globally and in India, prices of Mobiles are coming down and every month cheaper handsets are making their debut in the market. In such a scenario, in future too, prices of mobiles will keep falling continuously with the result that this increase in duty will get mitigated by the low cost of the handsets.” - Narendra Bansal, Chairman and Managing Director, Intex Technologies
“We were expecting the Financial Budget 2017 to offer incentives to start inflow towards design led manufacturing in place of assembly led manufacturing ecosystem. However, it seems like the government is 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 seem 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 will still 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.” - Kuldeep Malik, Country Head - Corporate Sales International, MediaTek India
“The move by the government to impose 2% customs duty on import of printed circuit boards for manufacture of mobile phones might initially result in a hike in the cost of smartphones. However, in the long run it will give a boost to governments’ efforts in pushing the Make in India campaign. Over the course of time, we can expect complete manufacturing of smartphones in the country by major players in India” - Vivek Zhang, CMO, Vivo India
“The Union Budget has outlined all the rights steps for the government’s central agenda of Transform, Energise, and Clean India. The lower corporate tax announced will help small businesses become more competitive in the global market while reduction in personal income tax is a step in the right direction to boost the consumption cycle. Preempting spate of cashless transactions in the days ahead, announcement of a new payment regulatory board will help in realizing Govt’s dream of a Digital Economy. Also, curb on cash transactions of over 3 lk will help in pushback of the parallel economy.” - Ajay Laddha, Co-Founder, YMS Mobitech
E-commerce and startups: Creating a cashless economy
“We commend the focus on growing the digital footprint in the country – enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Aadhar Pay to enable more digital payments are significant measures. Initiatives make an impact when there is continued attention and the announcement of today builds on the demonetization efforts of last few weeks. We also welcome the emphasis on skill development and technical education – this will enable India to successfully harness the demographic dividend.” - Kunal Bahl, Co-founder & CEO, Snapdeal
“It is a good year for SMEs, India’s backbone given the direct and indirect reforms announced for them. Five special tourism zones will enhance MSME development and bolster schemes for employment in textile, transport, agriculture, leather and hospitality sector. Ease of Doing Business for SMEs will thrive with push for infra in digital economy, Aadhar-enabled payment systems, m-wallets and digital payments. A lower borrowing cost and increased access to credit is on the anvil as a result of the government policy on currency and Banks being well nourished. With FIPB being abolished and maximum FDI coming from the automatic route it will aid diversified business. For many micro sized businesses the Presumptive tax rate has been reduced from 8% to 6% for non-cash receipts of upto INR 2 Crore is also very good and would lead to less cash and transparency as well as help in broad basing the tax base.” - Dinesh Agarwal, Founder and CEO, IndiaMART
“It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labor intensive sectors including housing, farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalization is great step towards strengthening the financial system of the country.” - Vijay Shekhar Sharma, Founder & CEO, Paytm
“We welcome the policy measures aimed at accelerating the adoption of a digital economy in India. The incentives for adoption of fintech equipment, expansion of digital infrastructure in under-served areas, Aadhar Pay for wider adoption by merchants and capping cash transactions at INR 3 Lakh, all together have kept the spotlight on building a less-cash India. In doing so, we will all help build a transparent and efficient future for our country. - Govind Rajan, CEO, FreeCharge
“The budget is focused on propelling the digital economy of the country though benefits to startups could certainly have been more. Concessions to startups have been limited and only startups which are recognized by DIPP will pay tax on profits for three out of seven years, increased from three out of five years. The budget has not offered big tax sop to corporates but has announced reduction of the corporate tax rate from 30 per cent to 25 per cent for those with an annual turnover of up to Rs 50 crore. It was heartening to see the increased allocation towards public expenditure and building infrastructure in India which now includes affordable housing as it will encourage long term growth. At last GST Council finalized its recommendations but till the time it is implemented no change in excise and service tax rates for now, which could have been considered.” - Swati Bhargava – Co-founder, CashKaro.com
“The Union Budget 2017 doesn’t provide any direct benefits to startups this year. Besides, the tax exemptions from capital gain are rather difficult to meet, at least in the early stage of 3-5 years for a startup. However, the newly announced exemptions for income tax of common people and well-rounded push towards digital payments will ultimately increase the buying capacity, along with mobile phone utility. These institutional changes, I believe, will push towards the growth of new age digital startups, albeit indirectly.” - Atul Rai, CEO and Co-founder, Staqu
“I believe the Government has taken concrete steps to give a fillip to the economy and yet tilt it towards white. Reduction of income tax by 5%, from 30% to 25%, for SMEs with a turnover of less than 50 Cr strongly indicates Government’s belief that it expects the SMEs to be major drivers for the economy. Reducing the LTCG window for property from 3 years to 2 years and putting affordable housing (below 30L) under infrastructure development category is also a significant step to improve the real estate sentiment in the country. We at Sulekha believe that this budget promises optimism for the local services and properties sector.”- Satya Prabhakar – Founder & CEO, Sulekha
“Kicking off on a good note, this year’s Railway budget brought happiness to many with the removal of service charges on bookings made through IRCTC - indicating the government’s focus to drive more digital transactions. Railway budget 2017 has laid out big investments in terms of infrastructure by claiming to invest upto Rs.3,96,135 crore in infrastructural development during the next financial year - we hope to see more technological advancements including high speed trains along with an increased focus on rail safety. This year’s rail budget of Rs.1.31 trillion is the highest ever till now, and about 8% more than last year.” - Aloke Bajpai, CEO & Co-Founder, ixigo.com
“This budget aimed at propelling India towards becoming a digital economy while increasing employment opportunities and having a determined focus on rural development. The Government’s push for digitizing infrastructure is heartening. Incentivizing cashless transactions at fuel stations, hospitals and railways, rolling out 1 million POS terminals by March and proposing a payment regulatory body to the RBI will help create a robust architecture for digital transactions. Activating Aadhaar Pay and providing referral bonuses and cashback schemes to promote BHIM will drive digital money in Tier 2 and Tier 3 markets. Reducing income tax by 5% for MSMEs with under Rs 50 crore in turnover will provide a huge boost to the spirit of entrepreneurship in the country. Additionally, by abolishing FIPD, the Finance Minister has made FDI much simpler and faster. E-commerce and retail will especially benefit from increased foreign investments, thereby fortifying India’s trade strength.” - Sashank Rishyasringa, Co-founder and Managing Director, Capital Float.
“This budget is good on intentions and is a fairly balanced one. The budget mainly revolves around farmers, youth and affordable housing. We welcome the tax exemptions that the Government has announced for SMEs and start-ups. The skill upgradation program and tax relief for the MSMEs are steps in the right direction. However, fundamental and institutional reforms are required for the growth of the sector. I was expecting more policy measures for the SMEs and the IT sectors at the grass root level. Increased spending on rural economy would help the country in the long run.The Finance Minister stressed for a Digital India encouraging cashless economy. Digital transactions were encouraged by offering small business under the presumptive income scheme. For all income through digital transactions under this scheme, the presumptive profit would be 6% and not 8%. I am hopeful that this budgetwould provide the much-needed boost to the economy and help it register better growth than the past year.” -Shashank Dixit, CEO, Deskera
“As a part of the start-up ecosystem, we expected a little more out of the budget particularly in terms of tax relief and GST. The budget does not provide any clarity on when GST will be implemented. Moreover, some of the other measures on simplification of taxes, increase in tax holiday period and easier access to unsecured loans are not been addressed in this budget. The only positive for Indian start-ups is the reduction of profit linked deduction for start-ups to 3 years out of 7 years. This will further improve the ease of doing business and will drive entrepreneurship in the country”. - Harshvardhan Lunia, CEO & Co-Founder, Lendingkart Group
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