Budget 2016: How IT and tech start-ups will make more business

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Indian IT (information technology) is happy that Finance Minister Arun Jaitley has proposed several measures to accelerate the growth of Indian economy.

Dinesh Malkani, president of Cisco India

For the IT industry, the Budget has outlined proposals and schemes that add thrust to the Government’s vision of digitization in India. The budget has been one of the most technology-oriented budgets we’ve ever seen. From technology platforms and data analytics to automation, the Finance Minister has bet largely on technology to encourage the digitization of G2C platforms, digital literacy, employment generation, and Smart Cities. The Internet and education are great equalizers and the government’s push for skills development of 1 crore youth in the next 3 years is a powerful initiative to transform India into a digitally empowered society and knowledge economy.

Umang Bedi, managing director of Adobe South Asia

Schemes like the digital literacy mission to e-educate rural households will work towards bringing more and more Indians into the folds of the connected world. Initiatives like the creation of an online repository of qualification documents, an e-platform for an unified agriculture market and other such measures will ensure robust IT platforms are deployed towards furthering automation – advancing the government’s Digital India mission in earnest. We expect this to translate into more business opportunities in the IT sector locally, and also drive skills development as well as creation of new jobs across the industry. Additionally, some reductions announced in customs and excise duties are likely to bring in positive headwinds for the sector.

M P Vijay Kumar, CFO of Sify Technologies

In order to make the Government’s social and infra spend effective, a good monitoring and audit system through independent accounting firms across the country is critical. Even if 1 percent of spend towards audit is actioned, the productivity of spend will increase by 3 times and we will see intent matching action; Intent has to grow beyond mere announcement in the newspapers. Equity of economic growth through social spend will also curtail inflation in the long run and help economic growth.

Shrikant Shitole, managing director, India, Symantec 

Enhanced investment in the budget for infrastructure, agriculture, rural and social sectors would support India’s continued journey of inclusive and sustainable growth. Protected and secure technology infrastructure fostering engendering trust will be critical to success of projects like e-marketplace, digital vaults for certificates and e-procurement. Legislative backing for Aadhaar should have requisite privacy provisions.

Debjani Ghosh, managing director for South Asia at Intel 

This budget, unlike any other, has not treated technology in isolation but integrated the effective use of technology across all the strategic imperatives in keeping with the intent of a Digital India. This budget has laid emphasis on governance reforms and ease of doing business, while highlighting the need for enhancing educational skills in order to make India a knowledge based economy. Intel along with NASSCOM launched the National Digital Literacy Mission in 2012 and we are very heartened to see the government’s continued commitment towards building  technology relevance at the grass-roots by extending NDLM to 6 crore rural households. We are disappointed with announcement of the R&D incentives reducing because we believe that it is critical for India to be one of the most innovative countries in the world and this move could be detrimental in building India as an innovation hub. I strongly urge the government to re-consider this move, as any restrictions on the R&D ecosystem are likely to decelerate innovation in the country and restrain the ambitious Make in India and Digital India vision.

Ashok Chandak, senior director, Global Sales & Marketing, NXP Semiconductors

Government’s commitment to encourage investment in manufacturing and infrastructure will propel growth and there are measure to boost the start-up ecosystem and IP development in country. The government has initiated additional steps on increasing local value addition for the Make in India of few electronic products such as set-top boxes, mobile phones, routers, telecom equipment’s, electric vehicles, solar products , computers, etc. with due importance as they hold the key to the nations’ inclusive development. Though, in short term the prices of these products may go up marginally. The initiatives to accelerate digital literacy in rural India and e – Learning platform is a good step towards skilling India. We expect that some of the funds made available for MoRT&H will be utilized for the road safety and infrastructure through use of technologies and we also expect All India Radio to speed up Digital Radio transmission in the spirit of Digital India.

Pramod Saxena, chairman and MD, Oxigen Services

We are happy with the general direction of the budget as it lays emphasis on development of the rural sector, digitization and reforms in banking. The digital literacy mission that has been announced which will target 6 crore households with financial literacy, with this the digital connect and payments connect will play an important role. Also, statutory status to Aadhaar will play a very big role in promoting digital payments, social benefit transfers and allowing several services beyond banking and insurance be brought into its fold.

Manish Sharma, president CEAMA and managing director at Panasonic India and South Asia
The Indian economy is growing at a rapid pace despite the global slowdown. The Finance Minister has clearly highlighted the growth pillars of the Indian economy in Agriculture, Rural, Social sector, Skills, Ease of Doing Business and Tax and Compliance reforms. We are happy with the government impetus on Make In India by providing tax and duty benefits and these will go a long way in strengthening the manufacturing capabilities of India. Another important milestone has been the use of technology to increase accountability of the government, authorities, and courts is a welcome step and will provide the right fillip to fast track procedures and will become the growth engine of the country. Skilling of youth of India by way of multi-skilled training institute and MOOCS will go a long way in tying the India growth story with the demographic advantage of India.

Anita Rastogi, partner – Indirect Tax, PwC India

The overall budget from indirect tax perspective aims to incentivize the domestic value addition to boost make in India. It has also introduced few cesses such as Krishi Kalyan Cess 0.5% on all taxable services and levy of infrastructure cess @1% on petrol and 2.5 to 4% on diesel cars. For ease of doing business there is rationalization of Credit Rules, allowing improved credit flow, reducing the compliance burden and associated litigation. There is also a mandate to set up 11 new benches of Tax Tribunal and introduction Dispute Resolution Scheme for indirect taxes.

Ravinder P Singh, director – Solutions Strategy & Business Development, IoT, Smart Cities & Digitization, Dell India

Anouncement on Digital Literacy Mission Scheme in rural areas is a key stepping stone to achieve next level of human capital transformation. India is going through a massive transformation with Smart Cities, Make in India and Digital India initiatives that will have far reaching impact in the growth of urban and rural India. Technology is not only the backbone for these initiatives but also a critical stakeholder for the success and sustainability of these programs.  We welcome the government’s initiative as this will help in building digital infrastructure from the ground up that will help India grow much faster and better to enable economic growth. Dell being a global leader in ICT Technology and end user computing, we consider this as a good opportunity to work with both the government and private sector and be an active player in this journey.  We are committed to support these initiatives by providing the next generation of technology solutions and being the digital architects for such programs.

Mohan Reddy, chairman, NASSCOM 

Our wish list for Budget 2016 included three key priorities – policy bottlenecks including ease of business; nurturing start-ups, products and ecommerce sector; and clarifications on transfer pricing to enable inward investments in India. Budget 2016 only partially covers these priorities. Extension of Section 10AA for SEZ units till 2020 is a positive outcome though the imposition of MAT on startups will not allow the full impact of the benefits to be realized.

R Chandrashekhar, president, NASSCOM 

The finance minister’s speech had a strong emphasis on leveraging technology to transform India. The initiatives announced today combined with swift implementation of Digital India will help to digitize India and provide effective citizen services. We would urge the government to move forward at a swift pace and build an effective PPP model.

Sumit Sood, MD, GlobalLogic India

We welcome the Government’s plan to launch a mission to provide Digital Literacy for rural India, as it is a very forward looking move. The drive which will bring about 6 crore rural households under the umbrella of being digitally literate in the coming three years is definitely going to put India on the road to becoming an economic power. In addition, the move to create a digital repository for all school leaving certificates and diplomas will give the education system an edge it had hitherto lacked. Moving away from a paper-dependent to a digital-led system is a hallmark of all modern economies.

Altaf Halde, managing director – South Asia, Kaspersky Lab

The announcement of Digital literacy scheme to be launched to cover 6 crore additional rural households is a welcome move. This will not only boost the fast adoption of digital technologies across the country but also encourage digital means to reach out to consumers and different markets. Start-ups getting 100 percent tax exemption for 3 years except MAT is again a good call taken by the government, as this will entice budding entrepreneurs to start their own business and since we are targeting this sector for our software business, it could prove beneficial for us as well. Besides, it will also help in creation of more and more jobs in the country. Overall, it’s a balanced and realistic budget in difficult times.

Govind Rajan, COO, FreeCharge 

Fair price shops are lifeline of India, especially in tier 2 and beyond markets. Government’s proposal to automate 3 lakh Fair Price Shops is a great step towards the overall Digital India agenda. This will streamline the processes within these shops and will make it easier for consumers to make purchases. With the recent announcement by Government around waiving off surcharge and convenience fee, this move will further open up the scope for automation of payments at Fair Price Shops by embracing new forms of digital payments like wallets.  We are also excited to see Government’s push towards research & innovation and 80 percent discount on filing patent applications by start-ups will further see new home-grown innovations coming from start-ups. This will  not only  bolster the ‘Start-up India, Stand-Up India’ initiative but also create a great environment for tech innovation in  the country.

Sunil Khanna, president and managing director of Emerson Network Power India

With an important focus on digitation, the government has shown good intent in keeping up the momentum of the Make In India and Digital India Mission. The government has shifted its focus from large cities to rural areas showing a clear intent to uplift those who belong to the bottom of the pyramid, especially the agricultural sector and focus on creating skilled labor.

The effort to incentivize the Make In India program by way of domestic value adding in the Electronics Manufacturing Systems segment is a step in the positive direction as is the removing of custom duties. This augurs well for us as majority of the spending in our industry is on imported ESDM Electronic System Design & Manufacturing items. From a taxation standpoint, lowering of Corporate IT Tax for companies not exceeding Rs 5 crore turnover to 25 percent plus surcharge is a positive move as it offers incentives to SMEs and SMBs in the country to focus on their growth. Another proposal that will benefit the country and stimulate start-ups on the growth trajectory is the amendments to the taxation for new manufacturing companies incorporated after is 1ST March 2016 as they will now have the option to be taxed at 25 percent plus surcharge and cess provided they do not claim profit linked to investment.

Ashish Jain, director – Finance, Xavient Information Systems  

No attention has been given to SEZ and IT sector units which are contributing a lot to the economic development of the country. MAT was imposed on SEZ units few years back which discouraged service sector exporters and particularly IT sector exporters to set up business inside SEZs. In general, there is nothing for medium sized corporates and individuals in this budget and rather cost of services have been increased in form of increased service tax which is a major disappointment for all.

Ambika sharma, founder of Instappy

India Government has been focusing a lot on the growth of woman Entrepreneurs in the country, cheering them to establish themselves. Allotting funds of Rs 500 crore especially for them will encourage the startup ecosystem to reach another level. Furthermore, since last budget, service tax has been the topic of discussion and by giving 100 percent exemption; the Finance Minister has done his bit to act as an enabler. Startups can more effectively and efficiently concentrate on establishing their businesses and weave their path.

Puneet Gupta, CEO of Buzzmeeh

Budget 2016-17 is a well strategized move for Indian startup industry. 100  percent deduction on profits for 3 out of first 5 years will definitely strengthen the base as it will assist in setting the right pace for the company. The amendment to the Companies Act in order to ensure speedy registrations of fresh startups will also lend a positive boost to the startup ecosystem. These positive moves will surely encourage the entrepreneurs wanting to establish themselves as a key part of the economy.

Padmanabha Krishnamurthy, CFO of Paladion Networks

It is a comprehensive budget covering various sectors and is focused on growth. With regards to IT sector to be more specific, few positive aspects are – thrive on innovation and patents from India, extension of SEZ deduction, increased focus on digital initiatives spend including rural areas are few things to mention.

Rahul Jalan, director of Indiaonline.in 

The proposed Digital Literacy Scheme for Rural India and allocation of Rs 1,700 crore for 1,500 multi skill development centers and increase in the exemption limit from 1 to 2 crore for the MSMEs are really the initiatives that will help motivate the small businesses even in the smallest towns and villages.