Union Budget 2021: How Tech Industry Reacts

On the heels of Finance Minister Nirmala Sitharaman’s Budget announcement on Monday, February 1, 2021, here’s a look at the post-budget reactions from the tech industry leaders.

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“The budget announcement confirms government’s focus on developing infrastructure and skills which will have short and long term benefits to Indian economy and people. From a technology point of view, the incentives for creating digital infrastructure, education and skilling spells out the government’s intent on developing the country’s human capital. Steps like international collaboration to develop new skills will help Indian youth prepare for modern job requirements and make them global ready. The announcement of the National Digital Educational Architecture (NDEAR) is a welcome step, which will help build a Digital First mindset in the entire education system in India and help students and educators adopt new ways of learning and teaching. In addition, we welcome the doubled allocation for MSME sector which will incentivise digital transformation of our small businesses that are the backbone of our economy.” – Ketan Patel, Managing Director – HP India Market

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“We are seeing some notable innovation coming out of India’s fintech ecosystem – be it for digital payments, credit and risk management, underwriting or security. The initiative  to set up a fintech hub in Gujarat International Finance Tech-City (GIFT) will spur investment and innovation designed to help financial institutions not just meet compliance requirements but also build more-personalized customer products and services. The move to set up a new asset reconstruction company and an asset management company to take care of stressed assets of banks will facilitate more options for banks to manage their NPAs as the true impact of the pandemic on NPAs is still unclear, and is expected to be fully known only by Q1 FY2022. The disinvestment and privatization related announcements related to the banking and insurance sectors will enable much needed capital infusion, and thereby, unlock new growth opportunities in FY 22.” – Sonali Kulkarni, Lead – Financial Services, Accenture in India

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“The budget has maintained continuity and consistency and in line with the themes of ease of doing business, simplification, transparency and manage effective delivery through digital channels.  As a digital company hearing announcement around leveraging digital technologies like video conferencing, e-assessments, e-invoicing, AI and ML for governance, incentives for digital transaction are heartening. From the IT industry perspective, quite a few relaxations on compliance, laws and also support came from the Government during the Pandemic.  Hope this approach will continue.” – Venkatraman Narayanan, MD & CFO, Happiest Minds

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“We welcome the increased focus on Innovation and on ease of doing business. This budget appears to have set the right pace for India’s journey to a digital first approach. From an IT services perspective, the industry is facing an intense global competition and needs tax incentives and digital infrastructure support to ensure seamless work from anywhere ecosystem, which is the new normal. This is a critical requirement for the sector that employs nearly 4.5 million professionals, contributes 8% of the country’s GDP, has created high-quality jobs during the pandemic, and is the face of Brand India across the world.” – Sanjay Jalona, CEO & MD, L&T Infotech

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“At a time of great uncertainty, the first ever paperless Union Budget 2021 stood out for its unremitting focus on economic recovery through higher spending and inclusive growth opportunities. The allocation of Rs. 50,000 crores over the next five years through the National Research Foundation to develop India’s potential as a global innovation hub is particularly exciting. This will undoubtedly provide greater impetus to the Indian innovation story. The Budget’s elaborate focus on developing healthcare infrastructure is also very encouraging. Technology will be a key enabler for building a robust healthcare ecosystem that can ensure universal access to high quality and personalized medical resources across the country. The other thing that stood out in the Budget was the major push to revive and drive growth for the MSME sector. Doubling the budgetary allocation for this crucial sector, coupled with reducing margin money requirements for startups and promoting ease of business for foreign investors will help this sector develop further.” – Prakash Mallya, VP-MD – Sales, Marketing and Communications Group, Intel India

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“I would like to congratulate the Government on its first paperless budget to push India in its digital journey. The economic survey highlighted India’s aspiration to compete on Innovation with the top ten economies. Allocation of Rs. 50,000 crore for the National Research Fund for next five years is a definite step towards boosting the research ecosystem in a coordinated way. Focus on Innovation and R&D, coupled with the PLI for electronic manufacturing schemes lays down a very strong foundation in building a self-reliant digital India. We are confident that the technology industry will join hands with the Government in its plan to enhance manufacturing capabilities and expand R&D centres.” Supria Dhanda, VP and Country Manager for India, Western Digital 

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“The six pillars of the Union Budget 2021 add enormous value to the economic relief post the pandemic issues and paint a futuristic picture for the new year. It has managed to address some of the key issues around Atmanirbhar Bharat, education and Digital India that presents significant business opportunities for global corporates such as Lenovo. With the PLI scheme announced along with the increased focus on ‘Make in India’ in this budget, we are confident that it will encourage local manufacturing, and further bolster the local PC market. Lenovo will also support the government in enriching India’s economy, by boosting digital infrastructure in the field of education and additional focus on promoting inclusive development. The national education policy also creates an opportunity to build the Indian EdTech ecosystem to make it best across the globe for research & innovation, and empowers the citizens to scale up their skills.” – Rahul Agarwal, CEO & Managing Director, Lenovo India

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“Budget 2021 is built on the foundation of new technologies such as Data Analytics, AI/ML,which will empower businesses with econsultation, escrutiny, and compliance management. This is surely going to enhance enterprise cybersecurity as AI has immense potential to bring in scalable and effective defenses against sophisticated attacks like ransomware. Also, as Indian businesses are concerned about their current level of cloud security, there is a need for initiatives that promote the development of cybersecurity skillsets. Additionally, this reskilling process should also take care of security of cloud environments which are the backbone of the accelerated digital transformation that India is witnessing due to the pandemic. While we welcome the Government’s proposed steps in strengthening MSMEs that provide employment to millions of people, we need more impetus on building skilled cybersecurity professionals in the country. The Government’s allocation of Rs. 3,000 crore towards skill development that will help reskill India’s youth and boost the overall economy, is a step in the right direction.” – Sunil Sharma, managing director – sales, Sophos India & SAARC

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“The Finance Minister has presented a balanced budget that is aimed at maximum growth of all sectors in the coming year. The Rs.1500 crore proposed scheme to incentivize digital payments is a welcome move that will accelerate the growth of cashless transactions in our country. During the pandemic, digital payments emerged as one of the key enablers of empowerment at the grassroots and brought millions of people under the fold of the formal economy. Government’s continued emphasis on increasing investment in Infrastructure, Insurance and digital payments will ensure financial inclusion of the masses.” – Vikas Garg, Chief Financial Officer at Paytm

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“The budget is a major step in the right direction. It outlays a strong focus on infrastructure, healthcare, capital spending, disinvestment, monetization, job creation and digitization. These measures are not only progressive and recovery-led, if implemented correctly would ease the burden on the economy and lead India towards the projected v-shaped growth and development. The budget talks about structural reforms in banking, enhancing debt financing and credit limits for businesses and asset monetization. This will lead to an increase in government spending, which, in turn will spur demand, therefore net positive for the industry. The several initiatives around job-creation, startups, reskilling, rural development and better quality of services to people are positive as a nation cannot progress without care for the environment and inclusive all-round transformation.” – Rajiv Bhalla, MD, Barco India

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“We would have loved to see some more announcements for the BFSI sector over and above the notable mentions like FDI limit being lifted for the insurance sector and the conversation to have happened on the shadow bad bank. While the Stressed assets are being moved to the asset recovery unit, we still have to wait and watch. It does make sense to take the assets to specialist to monetize it, but it also has the inherent risk of the bank just moving the bad assets rather than works on preventing issue of bad loans or prevents NPA’s. So we have to pay attention to its execution. And it is also to be seen who is going to be at the helm of the asset recovery to ensure that execution happens in the right way. There was emphasis on governance issues, and it goes with the turf of independent directors. So overall largely infra and healthcare, things have not been shaken up much, and attention is paid to economic recovery, but it is yet to be seen if this is a V share or U shape recovery. Let us hope the budget is executed well.”– Jaya Vaidhyanathan, CEO, BCT Digital

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“The standout proposal in the Budget is the absence of a new or additional tax levy. This is indeed welcome. However, the goals of disinvestment are very lofty and if these are not met, we will have a huge deficit. Implementation is the key. The proposals for capital expenditure on infrastructure and rationalization of tax compliances are very welcome.” – Dinesh Kanabar, CEO, Dhruva Advisors

“India needs significant investments and Technology is a key enabler and from that perspective, it could have been much better to invest more in our digital infrastructure. Indian IT Sector has done reasonably well to not only survive but also helped their customers globally to navigate through the challenging period. Increased investments in health and education can complement it even further. Support to the MSME sector can help some emerging providers in IT Sector. There is support to innovation and R&D which has been considered as one of the pillars for this budget. Investments in National Research Foundation is an important enabler for the future growth of innovation. This said, the devil is in the detail and we have to study it deeper to understand it more. Execution is as important as the intent and we will have to wait and watch how some of these get translated into actionable initiatives. Definitely, some of the digital initiatives like digital census and improved digitalization in income tax filing, etc. may bring some additional indirect benefits for better policy decisions. This remains a journey and more serious considerations are required for Technology sector” – DD Mishra, senior research director at Gartner, Inc.

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“The budget has announced big-ticket projects to add to the digital capabilities with the next general census in the country being the first digital one and along with marque MCA 21 project this is likely to garner massive ‘crown jewel’ assets in terms of the sensitivity and quantity of data. As these projects are rolled out it will increase the importance of security as the government builds the tools and workflows supporting these services. These projects will need to prioritize solutions such as Zero Trust Access, automated endpoint security, users awareness training to counter a range of threats, and will also need to ensure that solutions such as software defined networking and multi-cloud services are implemented securely.” – Rajesh Maurya, Regional Vice President, India & SAARC, Fortinet

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“The Union Budget 2021 is rightly focused on reviving the country from the aftermath of COVID-19 pandemic and ensuring sustainable economic growth. The announcements of incorporating one-man companies with no restriction in paid-up capital and turnover, increase in the MSME budget to Rs 15,700 crore, as well as an update in the definition of small companies under Companies Act, 2013 will also prove to be beneficial for Indian MSMEs and startups. Having said that, given the growth of digital adoption and the role of technology in accelerating Digital India and Atmanirbhar Bharat vision, both businesses and individuals particularly in Tier II and Tier III cities would value greater impetus on digital skilling and improved digital infrastructure to support innovation and the new normal work-from-home culture” – Nikhil Arora, Vice President and Managing Director, GoDaddy India.

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“The Budget 2021-22 has left the data science community quite excited for what is to come. For me it was really interesting when the Government announced that it will launch multiple data analytics, AI, ML driven models for e-security, e-education, e- consultation, and compliance management. Also, the prospect of using Artificial Intelligence and Machine Learning in GST Fraud Tracking is quite motivating and intriguing. The Government’s continued support for the startup is quite uplifting as the Government is setting aside Rs 15,700 crore in FY22 and has reduced margin money requirement from 25% to 15% for startups. The proposal of extending the tax holiday for start-ups by one more year will also give more confidence to the entrepreneurs.” – Gaurav Shinh, CEO & Founder, DAAS Labs 

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“The announcement of the National Language Translation Mission is a much needed effort by the government to reach our citizens in the language they understand. At Indus App Bazaar, the usage of apps in Indian languages on our platform has increased 2.2 times last year. We believe that with an enhanced app store ecosystem we will be able to break linguistic barriers and adding more value to the next half a billion Indian customers. Moreover, for Atma Nirbhar Bharat to be successful, the focus should be on technology innovation as a whole. We appreciate the government’s focus on innovation and R&D in the budget 2021.” – Rakesh Deshmukh, Co Founder and CEO, Indus OS