The Union Budget 2017–18 is going to be unprecedented in many aspects. For the first time the budget will be announced a month ahead of schedule on 1st February which otherwise is passed around the last week of February. The overall expectations from the upcoming budget is to provide a transparent taxation policy announcements to sustain the momentum, attempt 100% India manufacturing, promote cashless economy, boost digitalization, among many other things
Boost to the Digital India
As the country is advancing towards becoming a knowledge economy under the Digital India initiative with technology as the pivot, many think that the upcoming budget is a perfect opportunity to reinstate the blue-print for sustained growth and showcase ‘e-economy’.
Anirudh Dhoot, Director, Videocon says, with the implementation of GST, we are looking forward to a budget that can help the economy to grow further. We are expecting the upcoming budget to not only address and encourage alternative ways to carry out transactions in order to bring an upsurge in the purchase of goods but also empower the consumer to boost the demand. However, the proposed GST rate of 28% for the CEHA industry will have a great impact on the product price leading to an unexpected hike. Going forward, we hope that the budget will be in favour of the manufacturing industry and encourage Government initiatives such as Make in India and Startup India.
At the same time, as we are moving swiftly towards digitization, cyber security has become one of the biggest concerns of enterprises and Government. Nitin Bhatt, EY India’s Risk Advisory Leader, “Disruptive innovations and the digital transformation of businesses and governments are exponentially enhancing cyber-risks. What is worrisome is that the response gap - which is the difference between the abilities of the attackers and the capabilities of organizations is increasing as well, leading to this lack of confidence in the cyber security function.”
Further added, outdated information security architecture and controls has most increased risk exposure for India Inc over the last 12 months, with as many as 61% of the respondents citing this aspect as their topmost vulnerability. Careless or unaware employees is their second-most important concern (58%), while vulnerabilities related to mobile computing, social media and cloud computing also feature prominently as contributing to enhanced risk exposure for corporate India. Among threats, the majority (54%) believe that cyber-attacks are primarily targeted at defacing/disrupting organizations or towards stealing intellectual property or data (51%), followed by fraud (48%). The need of the hour is for organizations to review if their security governance and architecture is adequate to protect their crown jewels. Since cyber resilience cannot be achieved by buying “security-in-a-box,” organizations need to focus on gathering periodic threat intelligence, enhancing their threat-hunting and breach-detection capabilities, and institutionalizing a robust incident-response framework, says Nitin.
Dr. Gulshan Rai, National Cybersecurity Coordinator, National Security Council, PMO, Government of India. Explains, we are at the cusp of a cyber security paradigm shift and it is imperative that for the overall national security we join hands to share, evaluate and acquire threat intelligence and develop a robust operational framework to use this with security technologies. We will need immense focus to encourage technological innovations in cyber security to secure national critical infrastructure from cyber criminals.”
The use of IT in all industries is primarily to provide a strategic leverage and better the customer experience. Technology has been at the forefront of India’s recent economic growth and digital transformation. Rajiv Srivastava, Managing Director, HP Inc. India, says, “With the upcoming Union Budget 2017-18, the Government should look at rolling out initiatives to boost adoption of technology for education, skilling, manufacturing and infrastructure development that are key to India’s growth story. For the digital empowerment of citizens, the Government should look at making technology more affordable and introducing initiatives to encourage PC buying in the country. Government needs to create conducive environment and support eco-system where we have at least one PC per family as a means to accelerate technology proliferation and migration towards a digital economy. While the relaxation of FDI and the introduction of several initiatives have helped citizens embrace economic transformation and digitization, additional initiatives to boost domestic manufacturing will also help them adopt technology in its most tangible form.”
On the business front, IT manufacturers are bracing themselves for the implementation of the much anticipated Goods and Services Tax (GST). The Government’s objective should be to enable this transition from the current taxation system as smooth and orderly as possible - both for itself and for businesses and consumers. It will be important to outline a roadmap for IT manufacturers for the implementation of the new GST policy well in time.
“The previous two budgets have systematically gone about creating frameworks and processes to give wings to the dreams of multiple sections of the society like Start-up India, Stand up India and shrink wrapped with a larger vision of Digital India. With the recent move of demonetization trying to shift our cash driven economy of 1.2 billion people and getting them to leap frog to the digital world is unprecedented in history. This is a significant leap towards becoming a digital economy and the budget now needs to focus on how digital can become entrenched and become a way of life, while continuing to focus on growth and providing adequate support to the various pillars of each program so that the economy is on a sustained growth path,” states Anil Valluri, President, NetApp India & SAARC.
Alok Dubey, CFO, Acer India feels that the Union Budget for the year 2017-18 is likely to be unique as many prime factors like demonetization, GST, cashless economy measures, will play a key role this year. “We are expecting favorable change in the Income Tax slabs and rates, as customer spending is still anticipated to decline for short term due to demonetization.”
Alok also expects the budget to focus on shaping the IT infrastructure and urges the government to provide tax deductions on purchase of PC for consumers as well as providing easy short-term loans for retailers for working capital requirement. “This is required to accompany India's emergent IT sector and further help the industry make improved technology more accessible to Indian market to fulfill the government’s push for a digital economy, says Alok.
“In this budget the Government should take further steps to accelerate its flagship initiatives which have been structured holistically. There is a dire need for a strong and well-structured innovation agenda/policy for ‘Digital India’, ‘Make in India’ and ‘Start-up India’ to be a reality. Greater support for Digital India initiatives (in terms of allocating certain % of funds for Ministries/State Govt. departments) and enhancing access to internet connectivity in rural India should be a priority to boost economic growth and income-generating activities which in turn will boost domestic spending. To have a wider participation and deep technology penetration in rural India, a set of organizations/products are not sufficient and Government should encourage IT SMEs and start-up organizations focusing on domestic sector with innovative solutions/products,” states Debashis.
“In 2017, we expect the Government to further promote cashless transactions. That is why we await the announcements in the upcoming budget to understand the government’s move on additional SOPs for promoting cash less transactions. Regardless, this will mean an increased adoption of digital payment modes which can be vulnerable to cyber-attacks. So, at this juncture holistic security measures are the need for the hour, as a security solutions provider, our solutions enable organisations to enhance data security,” remarks Sanjai Gangadharan, Regional Director – SAARC, A10 Networks.
“Minimal IT budgets and lack of skilled resources to combat cyber security threats can ultimately cost organizations millions. The Government needs to allocate sufficient budget, time and focus to strengthening cyber security in parallel with the growing volume of digital transactions that are taking place in the country,” cautions Murali Ramalingam , Country Head- Ixia Technologies.
While the consumer durable industry awaits to recover from the demonetisation phenomenon, it also anticipates to be placed in the lowest - 18% slab in the upcoming GST reforms. “The historic budget of 2017 will be a nail-biting affair. The common man can expect a revision in the lower tax slab rates indicating higher tax savings. A healthy passbook in turn will further aid in a better lifestyle as consumers will spend more on consumer durables. Moreover, imposition of a higher basic custom duty on goods will curb imports and promote local manufacturing. Further, clarity on Duty Differential for mobile handsets will give the necessary impetus to Make-in-India under the GST regime,” states Manish Sharma, President & CEO, Panasonic India & South Asia and Executive Officer, Panasonic Corporation.
Pratibha K Advani, Chief Financial Officer, Tata Communications observes, “The past year has been an eventful one across economies and industries, but we look to the future with optimism and some very specific expectations for our sector. With the expected increase in tax collections due to demonetisation of Rs.500 and Rs.1000 currency notes, we are looking forward to a reduction in the rate of corporate tax and the abolition of all the surcharges/cess, etc. This is in line with the Hon’ble Finance Minister’s promise in his budget speech in 2016. Additionally, we expect a write-off of loans and advances as deduction from taxable income at par with bad debts.”
“We look forward to the budget to provide positive support in terms easing of taxes on these products to make it competitive for every Indian. We expect the Government to cut the tax rates and spend more on infrastructure development, and honour its fiscal deficit commitments. Apart from offering the IT and Electronic manufacturers of India or Make In India product as the first preference of choice for the government projects which would encourage the entrepreneurs of India to expand and create more job opportunities,” says P G Lakshminarayan, VP - Finance - eScan.
The mobile handset industry is another fast growing Industry and has become an imperative part of our everyday life. India is moving towards a digital economy and mobile banking and smartphones will play a crucial role in supporting this vision. “The entire country is looking forward towards mobile banking which shall create a new user base and fuel the growth in mobile Industry. As an industry, we expect a long-term and stable policy on mobile manufacturing in India. The industry has huge potential and can supplement government initiatives of ‘Make in India’ with highly technical product if focused. Incentives to create sufficient technical manpower will lay the foundation of a strong and robust manufacturing base in India. Further, a clearly laid out research and development policy is necessary to succeed in a highly technical industry like ours and will help bring component manufacturing base in India to save precious foreign exchange. In the end, to create a truly inclusive digital economy, affordable mobile handset or consumer durable items up to certain value should be given a concessional duty treatment,” tells Rajeev Jain, CFO, Intex Technologies.
Cashless Transactions picking up
The 8 November decision of the government to demonetise the high-denomination currency notes has impacted the working of the Indian economy. The decision is bound to have an impact on the coming budget proposals. While the impact of demonetization in the long run is yet to be completely ascertained, there is no doubt that it has led to mixed investment sentiments. With sectors adopting a wait and watch attitude (most likely till budget), the expansion plans have been put on hold. However on the positive side, the Govt. promoting a Digital and cashless economy, the investments from broadband service providers and telcos will see an upward march. Also investments from Govt in building a wide broadband infrastructure will increase.
Post demonetization, a remarkable increase in adoption of transactions through mobile wallet, payment bank, IMPS/NEFT/RTGS is observed. However, to realize the vision of a cashless economy, the government should announce further measures to campaign and encourage digital payments. “There is a need for RBI to subsidize switch charges to promote cashless payments. To glide through from cash based to card based products, MDR on debit card could be kept at feasible percentage for a prolonged duration. Measures may be taken for further securing the digital payments and organise focused financial education campaigns among merchants and cardholders,” says Debashis Nag, Vice President - IT & E-Governance, IPE Global.
Secondly, with demonetization significantly altering the dynamics of the entire national economy, expectations are high from the upcoming budget. Alongside countering black money practices, this move has helped the government in expanding the bracket of tax-paying population. This in-turn, equips the government to offer considerable tax rebates and SOPs focused towards societal development and growth. The ambiguities present in the modern-day service sector operations can be lessened with apt reform provisions in the budget. Lastly, for a holistic growth and development, focus on building a world-class infrastructure and real-estate industry is also critical. Both these sectors require better regularization and standardization support in order to foster an efficient business environment. I expect the upcoming budget to cater to this as well, through incentivized SOPs and other measures. ”says, Snehashish Bhattacharjee, Global CEO & Co-Founder, Denave
With the Govt. of India promoting Digital and cashless economy, the industry also expects benefits to be given to investments in building the IT network infrastructure. “As digital payments take off, we'd like this year's budget to focus on financial inclusion. We hope the Government of India reduces indirect taxes and charges levied on digital transactions. Further, income tax incentives should be provided to people who use digital payment options. It's also time that digital payment and documents be treated legally on par with physical instruments. We also hope that the Government increases the ceilings on employee tax benefits as they're now quite overdue. To aid merchants, the Merchant Discount Rate on card payments should be abolished. The industry can also benefit from tax incentives provided to organisations operating in the digital payments space. says, Ramki Gaddipati, CTO & Co-founder, Zeta.
With this the IT penetration in the country is yet to reach satisfactory levels and providing tax benefits to consumers purchasing IT products, at regular intervals, will help to increase the penetration levels.”
Thrust on SME Growth
There is also an expectation that the budget relooks at procurement norms to focus on quality and cost based procurement while encouraging wider participation from SMEs and Start-Up companies. “We hope that the Government will come up with some positive announcements and tax sops to cut through the growth barriers,” says Debashis. “Any thrust on growth, infrastructure, job creation and skill development is likely to have a positive impact for the IT/BPO sector. The government should also consider reducing excise duty on hardware (e.g. mobile phone, computer/laptop/Tab and other computing infrastructures) so that better technology becomes more accessible to wider populations.”
"I believe most of the SMEs in India are still facing funding shortage at their 'required time' and thus, are not able to scale up to their true potential. Being part of the SME lending ecosystem, I am looking forward to get this sector supported by an efficient policy framework,” observes Harshvardhan Lunia, Co-Founder & CEO - Lendingkart Group. “I expect the budget to incentivize lenders to create fast, easy and reasonable loan options for SMEs across the country.
Recently, the government has announced extension of credit guarantee limits of SME loans to INR 2 crores and extending the same to loans disbursed by NBFCs. It is a great step considering lot of new-age alternate SME lenders will also get covered under this scheme and increase penetration into this segment.”
To attract larger institutional players and create liquidity for SME loans, the government could possibly provide an institutional framework akin to bank in a box system. SME loans, individual and pooled, could be recognized as a separate asset class and listed accordingly.
Post demonetization, we believe, some of the above measures mentioned by different vendors would certainly help to create an ecosystem which would facilitate adoption of digital transactions and moving towards Government’s vision of cashless economy.
The question however is how to make it sustainable. “The infrastructure to sustain this is still in nascent stage. The National Fiber Network is still incomplete as it was envisaged. For the Cashless and Digital economy to become the prima donna, the user experience has to be uniform, reliable and absolutely secure. At present while many wallets and other payment options have come up post demonetisation with many payment options, except that of a few banks, many still do not have a solution that is highly secure and have an ‘easy to use’ user interface and experience. This may need us to write a very good India specific standard, adopt international technologies like Tokenisation and OEM pay solutions if needed or still better enable the Indian start up eco system to develop India OEM pay solutions under the UPI structure. Once this becomes available the adoption will be automatic,” sums up K Krishna Moorthy, Chairman, IESA.
G. V. Kumar Founder, CEO & Managing Director, XIUS, the telecom subsidiary of Megasoft
“In the Union budget of 2017, we want to draw government's attention towards investment allowance being given under section 32 AC. At present this investment rebate is limited to companies that are in the business of manufacturing products. Other sectors, for e.g. developing and building an infrastructure facility, telecom infrastructure service providers, core telecom technology creators, creation of broadband facility etc., are equally important and the investment advantage should be extended to these companies. This allowance will create ripple effect and enable further investments in these sectors. This approach is vital when the Government is leaving no stone unturned in order to take forward the digital payments and other e-initiatives in our country.
Having said that, we wholeheartedly welcome e-governance initiatives like Digital India, which are entirely supported by technology and are a result of continuous investments by the technology companies in cloud, Cyber Security, IoT and the like. Going forward, we expect the Narendra Modi led government to offer incentives in the form of weighted deduction on R&D costs similar to sectors, like Pharmaceutical and Automobile.”
Peter Chang, Region Head – South Asia & Country Manager for ASUS India.
“The mobile industry has registered strong growth in the past decade and half and is extensively contributing to India’s Gross Domestic Product (GDP). More so, in an attempt to boost digitization, the government amplified its push on cashless payments, deeming smartphones a functional necessity. Nevertheless, India still has a long way to go, as the smartphone penetration of the total potential population is still below 50 per cent of the overall market size, hence it is important that Government enables further acceleration of growth of smartphones. Post-Demonetization, the budget can look at rationalizing tax rates or changing the tax slab in a manner there more disposable income in the hand of people. Thanks to the ‘Make In India’ campaign, we have already seen major global smart phone manufacturers set up base in India. The government can now further work upon directionally establishing and strengthening the component ecosystem in India to further enhance manufacturing value chain in India.
Further, the Government should positively aim to introduce the much awaited and hyped GST at the earliest. With its impending implementation, the upcoming budget should not only detail out steps for its successful rollout, but also give clarity on custom duty / excise duty on mobiles post GST roll out. Additionally, to carry forward the Prime Minister’s vision of ‘Digital India’, the government should consider special incentives and taxation benefits on the entry consumer PC segment especially for below Rs. 20K.
Rostow Ravanan, CEO, Mindtree
ldquo;Currently the budget is viewed as an episodic event that highlights certain tax rates in some areas going up or down. For corporate India and Indians to plan their medium and long term financial and investment priorities, we strongly recommend that the Hon’ble Finance Minister outlines a larger 3-5 year fiscal roadmap for the country, explaining the priorities seen by the government and reforms that are being evaluated. If we have that larger picture, we can make our plans accordingly. Secondly the largest problem we face right now is that a country with our population size and GDP has very few tax payers. Consequently, the bulk of the compliance headaches fall on the salaried tax payer. We recommend simplification in tax administration to bring more people into the tax net and reduce the disproportionate burden on salaried tax payers. Thirdly the reported move to a January to December year is welcome and should be announced in this budget, this will help Indian businesses align with the global business practices. For the IT industry, the biggest expectation is that the GST implementation plans need to be revisited urgently. The current model given in the draft rules make it very cumbersome for the IT industry. Lastly, at a personal level, some of the incentives given to an individual tax payer needs to be streamlined and updated for current realities, for example, the limit for medical expenses is set at Rs 15000 per annum which is very inadequate for a family of 4 in urban India. I feel we should remove some of the older incentives which are not relevant anymore and increase the limits for other incentives which are more useful in today’s context”.
Sashank Rishyasringa, Co-founder and Managing Director, Capital Float
“Fintech startups have benefited from demonetization, as this has further fueled the growth of digital lending, e-wallets usage and other payment technologies. In the process of creating a cash free economy, we expect the budget to incentivize digital payments and provide for ample enabling infrastructure; this will encourage SMEs to adopt digital finance channels and become a part of the formal financing ecosystem. More and more consumers are opting to swipe their plastic cards and use e-wallets to purchase goods and services. As SMEs become more proficient with electronic payment systems, this is an opportunity for fintech firms to bring these SMEs into the formal lending ecosystem. On the Tax front, the expectation from the budget is for the Government to reduce personal income tax and corporate tax rates by revising the tax slabs. By revisiting corporate tax slabs, there is less incentive for tax evasion, and this will push the economy towards digital money. Reducing the personal tax slabs, will drive consumer spending and hence the economy. Also, the implementation of GSTN can create digitization of invoicing across the country by enabling easy filing of returns and tax payments. Finally, we expect the budget to use the credit guarantee scheme to bring banks & NBFCs on a level playing field and to continue boosting programs like startup India”
Anand Ramachandran, CFO, TechProcess Payment Services
“With the Demonetisation and subsequent push for Digital payments, the Government has thrown all it could to change consumer and merchant behavior towards less cash. However, the ‘acceptance’ gap still remains leading to the risk of cash returning as default payment mode after remonetisation. India being a vast country with multiple economic drivers, one sure way to push adoption is by mandating large billers in compulsive spends like utilities, government and education to achieve 100% digitization in a graded time-bound manner, and incentivize them accordingly. Let each biller decide on what strategy works best for them. Government should also consider a tax holiday for service tax and TDS on transaction fees which tend to have a cascading effect and adversely affects merchants and consumers. Also required is a common national law to deal with online payment frauds and consumer protection.”
Shilpa Mahna Bhatnagar, CEO & Co-Founder Evoxyz Technologies
“Today, India is going through an Economic reformation. This means each sector of Industry should benefit from the initiatives that are being taken by the government of India. Entrepreneurs are trying to change the face of India on the world map and The innovative start-ups are impacting the lives in a big way by generating job opportunities, inviting capital in the form of investments and bringing innovation to the door step of a common man.
Hence a favourable budget which means
A tax holiday is given to Start-ups for up to 6 years and Contribution of Government of India in the early stage Start-ups through a simple seamless process.
Also extremely negligible or Zero import duties on goods that need to be re-traded in India will give a big boost to the Start-up ecosystem and help them to flourish in a big way.
For instance, Evoxyz working for the cause of child security can create a better and faster impact in case we get this support from the Government of India.”
Pulkit Punj, Director at AnG India Ltd.
“With the immense focus on smart city projects and uptight security in banks due to demonetization, the security and surveillance market is looking profoundly favorable. In the year 2017 we expect the Government to continue the progress in infrastructures and investments in advanced technologies, as we firmly support the belief that a country’s infrastructure is insufficient without high quality surveillance cameras and security systems. With governments mandatory move of CCTV cameras installations, centrally monitored systems and solutions in huge numbers in verticals like banking, transportation, public places and more, the budget should invest significantly in video surveillance solutions and quality cameras in various segments to make India a safer and smarter country for our citizens specifically for creating a safer environment for women and children. . The Electronics industry can play a key role and the government should continue to offer necessary incentives, eased tax framework and infrastructure support, reductions in import duties of security equipment's with a proper oversight and resources for dealing with threats and attacks.”
Suman Reddy, MD, Pegasystems India
“From an IT employee perspective, there is an anticipation of increasing the minimum limit for taxable income. There is also a need restructuring of the tax slabs (currently 10% charged on 2.5 lakhs - 5 lakhs, 20% for 5 -10 lakhs and 30% on income above 10 lakhs) given the inflation over the years, increasing the limits will certainly help create a better consumption economy. The government could also re-look at the increasing the exemption limits on allowances such as house rent, travel, education, medical reimbursement etc.
Within the IT community, the focus on ‘digitization’ continues to remain a focal point. Transforming citizen services to become 100% digital will require a significant investment targeted towards upping our current technology capabilities and infrastructure in the country. As for the startup front, building of a cohesive ecosystem for entrepreneurs is a continuous process and we hope to see relief for the start-up community in the form of tax slabs expansion. Additionally, rationalization of MAT (minimum alternate tax) in special economic zones is another area where we can expect some traction.”
Vivekanand Venugopal, Vice President & General Manager, Hitachi Data Systems, India.
As we advance towards an economy under the Digital India initiative, we are optimistic the upcoming budget will create opportunities keeping innovation in the heart of every policy. To efficiently drive the journey of Digital India, the focus should be to modernize infrastructure as this will boost growth across sectors, especially technology. In the wake of large scale Digital Transformation, Data is becoming increasingly valuable.
To stay relevant it is important to institute industry friendly policies to better manage data through centralized data hubs and drive smarter decision making with help of data analytics.
The Government’s efforts such as GST is a definitive step towards accelerating digitalization. The policies and measures taken by the Government should help bring in economic stability, investment-friendly policies, increase ease-of-doing-business, improve long-term tax incentives, along with timely deal-closures and project clearances. Additionally, corporates and enterprises are expecting a cut in tax rates at various levels to grow more business opportunities in India to further allow the Make in India dream come true.”
Vinay Sinha, Head of Sales – India, Director – Commercial Business, AMD Asia Pacific-Japan (APJ) Mega Region), AMD
“Last year’s budget saw the Government focus on digital literacy by setting up a scheme to cover 6 crore rural households. Along with the ‘national digital literacy mission’ and ‘digital saksharta abhiyan’, these schemes will help democratize use and familiarity with digital devices such as computers, tablet PCs, and smartphones, as well asinternet usage. As a result, these trained workers can more actively and effectively participate in the cycle of development, thereby empowering start-ups and large organizations to experience digital transformation.
The rapid adoption of the Digital India policy aided by the strong, decisive, and time bound rollout of each of the related pillars fueled the demand for computers and mobility devices in the country. The government must continue to push these programs that proliferate digital services and digital inclusion to the common man.
The demonetization move resulted in slowdown of cash purchases, however, the balance of slowdown on cash purchases was offset to a small extent by increased online and B2B growth. The robustness of the digitization move and its impact will only be understood once we have enough data to measure the market movement.”
BVR Mohan Reddy, Founder & Executive Chairman, Cyient and Former Chairman, NASSCOM
“The upcoming budget for the year 2017-18 will be unique for multiple reasons and there is big expectation from every segment of the society. Also, this budget becomes even more important as the nation is going through a big initiative of demonetization which has impacts in various size and forms. In a country like India, where 86% of the transactions happens in cash, this is a bold step by the government to push the economy to a digital highway.
To promote a cashless economy, government, banks, financial institutions, payment intermediaries and companies will have to work together. All will need to make sure that the transformation of the Indian citizen from cash based economy to a cashless economy happens in a convenient and safe way.
There is a need of robust infrastructure creation to enable a smooth digital economy. India today has more than 700 million debit cards in usage. While we have 5.8 crore SMEs and micro SMEs, the debit card is accepted only in 14.4 lakh locations. Infrastructure building is something which needs time and government encouragement. The upcoming union budget should announce a more easier framework and guidelines to own the card payment machines or the POS terminals by the SMEs.
Right now many intermediaries and financial institutions levy transaction charges, like at petrol pumps. Such charges have to be removed to make sure people are not penalized for using digital mode of transactions. The union budget should announce relief on such transaction charges and should take a step forward and incentivize the usage of digital payments through discounts and tax waivers.”
Bhavin Turakhia, Co-Founder and CEO, Directi
“2016 saw a slew of announcements made by the government. With the goal of putting our country on the path towards a cashless economy, the Union Budget 2017-18 should include definitive SOPs and tax rebates to encourage and boost e-payments. Moreover, to achieve the goal of financial inclusion, the government should also rationalize indirect taxes and charges levied with respect to digital payment transactions, and further incentivize companies operating within this space. To adapt to the need of time, government should also rationalize income tax provisions including provisions related to employee tax benefits such that payments/ documents in the digital medium are treated at par with physical instruments.
As a natural corollary to the demonetization process, the time is ripe to increase the tax exemption limit and also the corporate tax limits. Steps should also be taken to help startups tide over its immediate effects. Furthermore, with the increase in cash flow within banks, advanced technological infrastructure will help facilitate seamless transactions and improve the overall banking system as we enter into the new financial year.
A startup hub, India is currently home to the third largest number of technology driven startups in the world. The previous year witnessed multiple markdowns in the country’s startup ecosystem and, therefore, to propel this forward, the PM’s flagship ‘Startup India’ project should receive an impetus in the upcoming budget.”
Gopal Pansari, Director - Savera Digital India
“These days government is announcing more economic programmes such as Make in India and Digital India, so we have positive and high expectations from the Union Budget 2017-18 as compared to the previous year. For FY17-18 we hope that Government should balance out the Businesses of the fast growing e-commerce Industry and physical retail industry by giving some tax incentives and government must implement GST to boost economic growth which will actually benefit the manufacturing industry and the export segments.
The government will be benefited by promoting R&D benefits for the organizations to innovate and come up with newer and better technologies. This demonstrates concrete actions to revive investment, increase growth and generate employment which will impact the industry. Support for Digital India initiatives and access to better network connectivity in rural areas will boost the economic and domestic spending of the country as more and more citizens will be able to access e-commerce sites. This will provide much needed growth to the e-commerce sector of our nation. Further, inspired from the Digital India concept of the Government and by keeping eyes on the Technology Driven Nation, we have also changed our name from Savera Marketing Agency to Savera Digital India.”
Mr. Sudhir Singh, Managing Director, Marg Compusoft Pvt. Ltd.
“The Government should facilitate SMEs & MSMEs in adoption of latest technology. They are playing substantial role in growth of Indian economy. Their growth means not only employment generation but also promotion of the culture of entrepreneurship in the country which is Make in India and Start Up India is all about. Organizations like Marg Compusoft having IT knowledge transfer platform should be promoted as they have an established ecosystem to serve the underserved sector of the economy; Government support will result in deeper penetration.
FMCG, Jewelry & Pharma should be given tax rebate against adoption of inventory and accounting software. This rebate will motivate them to organize business well and the Government will be successful in establishing more transparent structure.
Under skill development program, inventory and accounting courses should be promoted so that skilled force be created to facilitate 70 lakh + GSTN holders in near future. Organizations running education wings should be backed with financial facilitation from govt.”
Pradipto Chakrabarty, Regional Director, CompTIA
“While demonetization has been positively accepted by a large section of the society on the basis of projected benefits of the drive, it might have some short term economic downturn due to liquidity crunch, especially on cash dependent sectors such as FMCG and automobiles among others.
Since IT is a majorly a supporting sectors to others, we might experience a cut on IT budgets by consuming industries. This will in turn lead to IT organizations reducing overheads including salariesand benefits of employees. In such times, Government should step up and support the IT industry with the following suggestions:
A reduction of tax rates as well as increment in tax exceptions slabs will benefit individual tax payers including the IT workforce, especially at the entry level.
The IT sector has never been recipient of incentives on R&D expenditure unlike the life sciences industry. An extension of such incentive to IT sector will be highly motivating for companies to invest in technology R&D. The global IT Industry is going through a rapid transition towards automation which leads to reduction of workforce and investment in automation. This is a key threat to the Indian IT sector which earns a major chunk of revenue through manpower heavy services to international clients. It is high time that we focus on research and development related to creating patented and saleable IT products. The future performance of the India IT sector will lie in its ability to transition from a purely service oriented business model to product oriented revenue opportunities.
Demonetization has seen a huge surge in cashless electronic transactions. With this, we might foresee cases cyber security threats. The Government should think about dedicated budget provisions for developing a stronger cyber security framework and infrastructure of the country, which should include skill development in this domain
We see a widening skill gap in the IT industry. With technology growing in complexity this gap will keep increasing. Increment in allocations for IT skill development through educational institutes will be appreciated by the industry.
L C Singh, Vice Chairman & CEO (Founder) - Nihilent Technologies
“As IT enabled services industry embrace the influx of enterprise applications and cater to the modern business requirements, the sector expects unvarying support from the Government to promote R&D practices in the country. To maintain its leadership position, the sector looks forward to continued support from the Government to not only ensure the financial viability of the sector but also to trigger a wave of innovation particularly on the backdrop of the digital demand from global organizations.
Lastly, the demonetisation measure has triggered a positive impact on adoption of digitization and Digital India has set foot in a true and meaningful sense. On this backdrop, Government support in terms of tax rebates, concessions for new-age technological innovations would serve a long way towards further enhancing India’s position in the global Intellectual Property (IP) landscape.”