Union Budget 2018: Reactions from the IT Industry - Part III
IT News Online Staff
2018-02-02
Shekar Sanyal, Director and Country Head, the Institution of Engineering and Technology (IET)
The Union Budget 2018 with its very specific focus on quality of education is a reassurance to the education sector. The introduction of Diksha initiative with an aim to provide teacher training is a great move. The IET is more than happy to extend its support to the Government through the Faraday program, which emphasizes on STEM education for teachers and students.
Secondly, the stress on digital learning is in complete sync with the Digital India movement. It is quite relieving to know that this time the government has taken a step towards encouraging talent growth in India. With the idea to set up another 18 IITs and NIITs along with the scheme to identify bright students pursuing B Tech in premiere engineering institutes, and providing them higher education opportunities in the IITs and IISc, we hope the vision of making India an education hub comes true very soon.
All in all, this year's Union budget is very promising and we at the IET are excited to work along the lines of the Government's vision in providing quality education and developing and retaining excellence within our country.
Thiru Vengadam, Regional Vice President India, Epicor Software
We welcome the Government's proposals in the Union Budget 2018-19 that incentivize MSMEs. The budget proposes bringing down the corporate tax for firms that reported turnover up to Rs. 250 crore, thereby reducing tax burden on MSMEs. Further the Government has allocated funds for 2018-19 for credit support to MSMEs.
For MSMEs technology is an enabler for business growth and technology adoption is seen as a top priority. However, MSMEs are often unable to utilize the opportunities available through technology due to lack of working capital finance. The budget proposals of access to credit and tax breaks to MSMEs will help reduce capital constraints and encourage investment in IT solutions such as enterprise resource planning (ERP) to help them work smarter, operate more efficiently and be innovative. The Budget announcements will further encourage technology vendors such as Epicor to continue adding value to medium sized businesses through technology offerings that help them grow now and positions them for success in the future.
Mitesh Shah, Head of Finance, BookMyShow
The Union Budget 2018 is both populist as well as pragmatic. It focuses on growing the promising rural economy and extending digitalization to rural citizens, which can yield great results in the form of increased household rural consumption, and thereby providing Internet driven businesses with a great potential market opportunity to tap. Increasing allocation for digital India and the overall strong thrust on digitalization is a welcome step. Initiatives such as high speed connectivity and Wi-Fi access to 5 crore rural citizens and tax disallowance on cash expenditures above Rs. 10,000/- for all entities now also give digital movement a great push and will benefit internet businesses. However, some more direct incentives for promoting digital ecosystem in form of lower MDR or cashbacks would have been welcomed by online platforms as well as merchants.
The move to levy 10 percent LTCG is commendable in the larger interest of the Economy and Fiscal situation. Another significant change proposed in the budget is inclusion of 'Significant Economic Presence' in the definition of 'Business Connection' whereby even digital presence of Non-resident enterprises in India through digital platforms shall be construed to be taxable presence irrespective of whether or not the non-resident has a place of business in India or render services in India. This provision will bring about paragon shifts in nexus rules under DTAA.
There is also positive news for startup ecosystem as the benefit of dedication u/s 80-IAC is extended to startups incorporated even after 1st Apr, 2019 but before 1st Apr, 2021. The budget also brings lot of clarity around tax administration and rationalization as well as relief from MAT for companies admitted under Insolvency Resolution Process. With 99 percent of corporates now being covered under the reduced corporate tax rate of 25 percent, the Finance Minister has substantially lived to the commitment of rationalizing corporate tax made in 2015.
Ravi B. Goyal, Chairman and Managing Director, AGS Transact Technologies
As India's leading end-to-end payment solutions provider, we appreciate the Government's agenda to push 'ease of living' since it will simplify lives through technological innovation thereby spurring automation.
With the Government recognizing the immense potential of MSMEs and trying to nurture a financial ecosystem for them to grow, Fintech companies will play a critical role in financing space for MSMEs. Online loan approvals for MSMEs will enable higher MSME financing and reduce the cash crunch faced by them.
As anticipated, digitization is the foremost agenda this year as well. With the allocation to Digital India scheme being doubled up to Rs. 3073 crore, financial inclusion will receive the much needed impetus. The announcement to allocate Rs. 10,000/- crore for creating of 5 lakh Wi-Fi hotspots to provide broadband access to 5 crore rural citizens will ensure Digital India initiative penetrates deeper into the remote areas. Overall, these initiatives will definitely enable the booming FinTech and Banking Payments Services industry to further enhance this growth.
Additionally, the Government's plans to come out with a policy to introduce toll system on 'pay as you use' basis along with the system of cash toll payments being replaced with Fastags and other electronic payment systems will make road travel experience effective and seamless.
Sameet Gupte, CEO, Servion Global Solutions
The key highlights of Budget 2018 have indicated that the India government's vision for the country's future is in line with economic, societal and technological changes that are happening across the globe. Having doubled its allocation to the Digital India scheme, the government is looking to heavily invest in R&D of new areas such as machine learning, artificial intelligence, and robotics. With the push for more focused and relevant higher education, these are exciting times for young Indians as consumers and enterprises alike get ready to ride the automation wave.
Mayank Bhangadia, Co-founder and CEO, Roposo
While Budget 2018 is majorly focused on the agriculture and education industry, there are a few points which may act as the foundation of future growth of startups in India. The reduction of corporate tax is clearly one of them and would surely help to some extent. The proposed plan to set up 5 lakh Wi-Fi hotspots is also quite a progressive decision, given that it is implemented properly and as soon as possible.
The budget would have been a lot better if it focused more on start-ups, which comprise the bottom of the industry pyramid. I believe incorporating that into the plan would have helped in the progression of the industry as a whole. Apart from that, I am quite glad that the Government has placed growth as its main agenda for the budget rather than the 2019 elections.
Jay Chen, CEO, Huawei Telecommunications India
We applaud the forward looking Union Budget 2018 where the Hon'ble Government is extensively focusing on digitalization with further support to initiatives like Digital India, Smart Cities, Swachh Bharat among others. The Union Budget laid down plans to connect additional 1.5 lakh gram panchayats with fiber optic networks under the BharatNet. This will create access and affordability and will help in bridging the digital divide even further.
The Union Budget 2018 will further strengthen India's journey towards Digital Transformation and reinforces the foundation to help us in building intelligent networks and reshaping the world.
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