Infotech Lead Asia: Indian IT industry says Budget 2013 brings growth for the sector.
This year’s budget is for the masses yet a responsible one emphasizing on the fundamental premise of growth.
Rajesh Janey, president, EMC India & SAARC, said: “We welcome the Government’s focus on fiscal stimulus, growth imperatives, important areas of social development, education with an emphasis on skills building for the youth, attracting FDI and incentivizing the MSME industries all of which are imperative for the country’ transformation.”
“We believe a lot of the key initiatives outlined will leverage technology at the core whether banking norms compliance or ATM expansion or transforming post offices and the textile sector or rolling out Aadhaar enabled payments for various government schemes among others. Additionally, the fund for promoting science and technology innovation for the common man All of these augur well for the local IT industry and will improve competitiveness of industries and significantly enhance service delivery,” Janey added.
Overall, the Union Budget for 2013-2014 is a realistic one hinged on growth and development oriented expenditure. The focus on technology infusion in agriculture and provisions regarding MSMEs will spur the growth of the economy in the right direction. The budget highlights the need for public sector banks to be compliant with BASEL3 norms which underlines the need for having a robust and connected security framework which can help banks comply with such regulatory norms.
From an IT standpoint, this is a marginally encouraging budget.
Jagdish Mahapatra, managing director, McAfee India & SAARC, said: “We were hoping for the discontinuation of MAT on SEZs and apportionment more grants to ensure secure data access which hasn’t been considered. The other disappointing aspect is the surcharge for MNCs in India has increased from 2-5 percent, if the taxable income exceeds 10 crores. On the other hand, the incentives to semiconductor wafer fab manufacturing facilities along with provisioning zero customs duty for plant and machinery is quite positive. In a nutshell, this is only a marginally encouraging budget from an IT industry perspective.”
The government has focused on enabling faster, sustainable and more inclusive growth as well introduced some key reforms for promoting overall economic development.
A part of the Indian IT industry says that Budget 2013 is about stability and bringing positiveness.
Harsh Chitale, director, HCL Infosystems, said: “I believe is a better budget then last year. This budget has stressed on some vital areas such as youth, education and skill development. Infusion of funds in the education sector without change in education cess, certainly is a step towards the nation’s development.
Furthermore, employment and productivity were well addressed too, as government plans to promote youth skill development for jobs; exemption of service tax will continue to encourage human development. There was not much spotlight on IT and technology as such but, it’s good to see the serious intent of the government to pass a GST law. Moreover, the government’s move to modernise and develop infrastructure will be much appreciated by the industry.
Rajat Jain – MD, Xerox India, said: “The announcement of a GST law that will be drafted by the State Finance Ministers & the GST Council and allocation of a sum of Rs 9,000 crore towards the first installment of the balance of CST compensation for States is a welcome step towards much awaited fiscal consolidation.”
“Further, the 15 percent tax allowance for investments over Rs 100 crore is amongst some of the important measures announced for promoting investment in the country,” Jain added.
Overall, there is the much needed focus on infrastructure growth. The stress on education continues unabated, with the Rs 65000 crore allocation, and the continued focus on inclusive growth is heartening. Reassurances around the innovative direct cash transfer scheme and allocation of Rs 80,194 crore in 2013-14 for Ministry of Rural Development, along with measures to promote skill development amongst youth bode well.
Significant steps have also been announced to promote innovation and talent development – promising a holistic march towards the FMs vision of becoming a much stronger economic power by the end of this decade.
Ravi Kiran, co-founder, VentureNursery, said: “Investment in TBI to qualify as CSR investment is welcome. The move to allow investment in technology business Incubators to qualify as CSR investment is a good start and good for tech incubators. Hope it comes with a mechanism to establish accountability of such investments. The Government needs to recognize private accelerators’ role in the entrepreneurial ecosystem as well.”
Continuation of non-tax benefits 3 years after the Micro, Small and Medium Enterprises move to next level is welcome, even though the exact impact will need be assessed. I would also have liked to see reforms in the way we define MSMEs today as it is fundamentally flawed in today’s context. Angel Invested Funds getting pass through benefit needs to make a distinction between pooled angel investment versus individual investment.
The FM’s intentions are very clear: to move India back to a higher growth plane. And given his lack of runway, he has taken lots of small measures which together could boost growth. From a technology perspective, allowing funding for technology incubators located within academic institutions to qualify as CSR expenditure as per new Companies Act will give a huge boost to entrepreneurs and start-ups and increase the engagement of the corporate sector and start-ups.
N Chandrasekaran, CEO & MD, Tata Consultancy Services, said: “On the taxation front, removing double taxation on dividends received from overseas arms will reduce the burden on shareholders. From the perspective of the IT industry, the clarifications on taxation rules regarding development centers and safe harbor rules are very welcome as are measures to drive skill development, with a special focus on Tier II and Tier III towns. Overall it would be safe to say that with this budget we have started our climb back to higher GDP growth levels.”