Take 2: More Tech industry reactions to India's budget 2015

01st March 2015
Take 2: More Tech industry reactions to India's budget 2015

March 1 2015: Shorn of the  polite language, the consensus in Corporate India seems to be  'Could do better' .  Here is our second instalment of industry views on the Union Budget for India 2015-16:
Amar Babu, President, MAIT
: Budget 2015 is a balanced budget that touches upon many areas of infrastructure, universal social security vision, insurance for all, education among others. From an IT industry perspective, it is a mixed bag with the inverted duty structure being finally addressed with the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2% without CENVAT credit are positive steps to encourage tablet manufacturing in India. However it disappoints as no initiatives have been taken to increase PC manufacturing and promote exports.  In this budget, we might have missed an opportunity to drive 'Make in India' in computers.
R. Chandrashekhar, President, NASSCOM: Our wishlist for Budget 2015 included three key priorities – policy bottlenecks including ease of business, procurement challenges and nurturing start-ups. Budget 2015 does cover some part of these priorities. However, some concerns remain and we would urge the government to address these issues on priority
Some of the areas of concern include:
-          Increase in tax rates for both service tax and  net corporate tax rate
-          Angel tax continues: Fair market valuation applicable to angel investments taxes capital receipts in start-ups.
-          Dual Levies on software continues, and high rate of TDS (10%) on all software transactions including start-ups constrain cash flows
-          SEZ revival: Nothing was articulated on issues like MAT
-          No steps to mobilize domestic investors
-          Lack of incentives to develop tier 2 / 3 locations, employment creation. Incentives announced in budget are restricted to the manufacturing sector.
-          Measures for increasing access to government procurement for product companies and SMEs not provided
-          Definition of royalty which is not aligned to global practices
-          Place of provision of service related to export of testing of services etc.
Sanjay Deshpande, Co-Founder and CEO, Uniken: The government has demonstrated great foresight in recognizing the potential of start-ups in contributing to this vision. Encouraging the spirit of entrepreneurship will provide a fillip to innovation, boost employment, enable an inflow of foreign exchange through exports, foster self-sufficiency and indeed, significantly contribute to India’s renewed economic growth.As with the interim budget, this current budget recognized the start-up sector as an area for growth and development and has sought to launch a mechanism to boost entrepreneurship SETU (Self-Employment and Talent Utilisation), that has been envisaged as a Techno-Financial, Incubation and Facilitation Programme, is a welcome initiative. I am confident that the 1000-crore allocated by the government to SETU will go a long way in supporting all aspects of start-up businesses
Toshendra Sharma, Founder & CEO, Wegilant, SINE IIT Bombay: This is certainly a move in the right direction for fostering a sound startup ecosystem in our country. Any assistance from the Government would be a shot in the arm for startups & small businesses. With support towards the ‘self-employment’, being a start-up we comprehend the importance of any kind of support and when it comes from our country’s government, we truly wish to deliver the best for the country and make a difference at large! - 
Nigel Eastwood, CEO, New Call Telecom: The Government delivers on its promise of strengthening the infrastructure sector. The reduction in corporate tax from 30% to 25% over next 4 years is a welcome one. The reduction on taxes on technical services from 25% to 10%  will also cut down costs for service providers like us who have focused plans for realizing the Digital India dream.  
 Sanjeev Sarin, Founder & CEO, Ozone Networks: It’s a budget for the working class and professionals. It gives a big boost to the farming and manufacturing sector and also encourages employment opportunities by giving preference and building a strong foundation to domestic manufacturing in India.  A very encouraging step forward is the decision to induce investment by 70,000 crore in the infrastructure sector for FY 15-16. Health & Education has been a strong focus in the budget and the Government should be lauded for its decision to provide concession to senior citizen on medical expenses.”
Bhaskar Pramanik, Chairman, Microsoft India: The Budget reiterates the major programs and initiatives that have been previously announced – Jan Dhan Yojana, Skill India, Swach Bharat, Make in India and Digital India.The focus on technology as a backbone for government processes and systems is the right approach example GSTN, JAM was stresse. The Government has recognized the need to support startups, and incubators and has acknowledged that a culture of innovation needs to be fostered. Budgetary allocations for incubators, a mechanism for supporting self-employment and talent utilization will allow startups and MSMEs to access the funds and talent, creating new avenues for growth and employment . Speedy implementation of the national fiber optic network will enable more rural communities to benefit from the ecosystem of services that can make governance more effective. The trinity of Jan Dhan – Aadhar – Mobile that the Finance Minister referred to, is indeed positive in a mobile-first, cloud-first India. We will need to see if some of the  tax related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have of driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20%.
M P Vijay Kumar, Chief Financial Officer, Sify Technologies: The new government’s first full-year Budget Proposal is exciting with ‘Swachh Bharat Abhiyan’ and ‘Make in India’ as their key focus. Some of good initiatives include abolition of the wealth tax and increase of domestic transfer price from 5 to 20 crore. Additionally, the government's proposal to decrease corporate tax from 30% to 25% and removing the various exemptions which contribute to multiple tax disputes are some good steps in the direction of making tax administration simple.
Suresh Senapaty, Executive Director & Chief Financial Officer, Wipro Ltd: The government’s objective of accelerating economic growth is laudable. The focus on ease of doing business will spur growth and economic development. The thrust on employment generation in manufacturing is welcome. The Budget has accorded due regard to technology. While the Budget laid stress in adopting information technology for governance in plugging subsidy leakages and  in tax administration, it has also supported technology innovation in Industry by rationalizing tax on royalty.
Eberhard Kern, MD and CEO, Mercedes-Benz India:The commitment to infrastructure, announcement of GST with a specific timeline and a simplified tax structure greatly enhances ease of doing business in India. These positive steps will simulate growth and  should indirectly help the automotive market. It is crucial now that these measures are implemented within the next 12 – 18 months to accrue desired results.
M Murali, MD, Shriram Properties: The Economic Survey has projected a growth of 8.1% – 8.4% in FY16 .To accomplish this, the survey has advocated higher Government spends for infrastructure followed by higher private sector participation. Finance Minister in his budget speech has said   that Investment in infrastructure will go up by 700 billion rupees in 2015-16 over last year .This is laudable and the move indicates  that we are on the proper growth path.While the Fiscal deficit is seen at 3.9 per cent of GDP in 2015-16  , I would also appreciate the approach of   keeping  fiscal discipline in mind despite need for higher investment  
Sudhakar Ramasubramanian, MD, Aditya Birla Money: It is growth enabler at  a slight cost of Fiscal prudence - step in right direction. Roadmap to cut the corporate tax and clarity on GAAR are other positives from Foreign investor‘s perspective. Intent of government to curb black money is noteworthy. Subsidy on fuel has been halved while the FM has budgeted for higher divestment proceeds. Pick up in taxes will be gradual and linked to revival of the economy; therefore targeted disinvestments will be the key to boosting government’s non-tax revenue kitty.
Alok Ohrie, President and Managing Director, Dell India: Some of the forward looking statements made by the Finance Minister have a bearing on our sector – exemption of SAD, reduction of Basic Customs Duty on electronics components, inputs etc., ease of doing business, encouraging startups and the big boost to healthcare. However, we’ll need to review the notifications before any predictions could be made on the impact on the sector. 
S. Rajendran, CMO, Acer India: Some of the bold announcements made by the Finance Minister and have a direct bearing on our sector - infrastructure spending, direct transfer to beneficiaries, committed date of April 01, 2016 for Goods & Service Tax (GST) and enhanced social security thrust will convey a reassuring message to potential overseas investors. However, we’ll need to review the provisions before any predictions could be made on the impact they will have on the sector. IT industry expected more from the budget. While some progress has been made towards addressing the inverted duty structure and dual Central Value Added Tax (CENVAT) structure for encouraging local assembly/manufacture of tablets and smartphones, keeping out PCs with the attendant increase in Excise duty/CENVAT from 12.36% to 12.5% in addition to the jump to 14% in service tax bodes ill for increasing demand for this category which is already suffering from woefully low penetration rates.
Ravi Swaminathan – Managing Director, AMD India:  The exemption of all special additional duty (SAD) on inputs/components used in the manufacture of personal computers is a significant step towards integrating India into the global supply chain enhancing the technology capabilities in hardware.Further, the thrust on NOFN will provide a tremendous opportunity to bring Digital-India's vision to the fore. The opportunity arising from the enhanced connectivity will address the issue of enhancing infrastructure penetration in the country. Broad band connectivity, improved access to services through IT enabled platforms, greater transparency in Government processes and special focus on supporting software product start-ups are noteworthy initiatives towards enabling not only the industry but also citizens at large.
Rafiq Somani, Country Manager India, ASEAN and ANZ, ANSYS: With the current Government promoting domestic manufacturing via the 'Make in India', this initiative is taking good shape. In today's budget the government emphasized heavy investment in infrastructure, defense, electronics and skill development. All consistent with transforming India into an indigenous self-sustained ecosystem for research, engineering and manufacturing.
Rohit Aggarwal, Founder and CEO of Koenig Solutions:The FM has proposed Rs 1,000 crore to help IT start-ups, and support funding needs of small firms. The FM rightly recognized the IT sector as one of India’s leading employers in the services sector. The financial proposal will boost entrepreneurship in the IT sector and create more jobs.This is a manufacturing friendly budget, very much in line with the ‘Make in India’ thrust. From the point of view of the IT industry specifically, the streamlining of the Special Additional Duty will pave way for local manufacturing benefits to some IT products.