February 3 2018: More budget 2018 reactions. Our earlier compilation is here
NASSCOM welcomes the Finance Minister’s statement on increased investment for AI, comprehensive initiative on Cyberphysical systems and focus towards creating a 5G test bed. This will enable India to leapfrog in areas of emerging technologies globally. The proposal to review the outward direct investment will be of great relevance to the IT sector as it charts its global growth trajectory.
Significant announcements related to Start-Ups
- Harmonization of the definition of ‘eligible business’ for a start-up with the modified definition by DIPP.
- Extending the Startup India scheme to March 2021 and rationalizing the condition of turnover, will enable tens of thousands of start-ups to avail benefits under the Act.
- Evolving a distinct policy for hybrid instruments, which are suitable to attract foreign investments in several niche areas, will advantage start-ups and venture capital firms.
- Right environment for Fintech companies to grow in India, as well as a commitment to adopt blockchain technology.
The government’s financial allocation to the Bharatnet project along with the establishment Wifi hotspots in rural areas a big boost to the rural digital economy further helping the country to bridge the digital divide.
India Electronics & Semiconductor Association (IESA): Ashwini K Aggarwal, Chairman: Announced MSME benefits augur well for the industry. Stated ESDM / electronics sector focus is good with various measures taken to make it easier to do business across sectors. With this, the industry hopes for appropriate kick-start packages to enable Make-in-India in this sector, we hope to see this in the fine print. Additionally, the provision for the development of 2 defence industrial production corridors in India, will boost indigenous manufacturing and make India more self-reliant for its defence needs.Welcome measures for regulating regimes for venture capital funds and angel investors will ensure a further boost, especially to the start-up sector. . Increased scholarships for select 1000 BTech students for PHDs at IITs and IISCs will strengthen domain knowledge and drive the innovation ecosystem.
D.D. Mishra, Research Director at Gartner : The budget does not generate excitement to the extent that was anticipated. Though the extension of rural WiFi hotspots along with investments in telecom can enable rural economy and drive much better financial inclusion and drive technology enabled growth for the subset of our rural population, we need a better connect between strategy and execution especially in terms of digital India so that we are able to fully leverage the enhanced allocation.Looking at the overall picture, I feel that the approach is more fragmented at the moment and outcome and objectives of digital India needs to be better connected with the investments which are being made.Rather than restricting cryptocurrencies, they can be regulated to prevent any adverse impact and risks while exploring blockchain side by side and leverage opportunities which are available with new concepts and technologies that they bring to the table
Arun Singh, Lead Economist, Dun & Bradstreet- India: The Union Budget FY19 has given more than what was initially expected as far as rural, social and infrastructure sector is concerned. Increased allocations and measures announced towards agriculture sector, rural infrastructure and social sector including health, if implemented timely and fully, have the potential to kick-start growth momentum in the economy. This was one of the most appropriate ways to provide some relief to these sectors which were highly impacted by two structural reforms i.e. demonetization and GST implementation. This would also address agrarian crisis and unemployment scenario to some extent. While the announcement to increase the minimum support price to 1.5 times of production costs is a good move towards increasing farm income, this will have some repercussion on the overall inflation rate going forward. However, we don't see a scope for an RBI rate cut. Further, deviation from the path of fiscal consolidation was widely expected and much warranted given slowdown in the investment activity. In addition, lowering of corporate tax, and measures to improve the capital and credit availability for MSMEs, are steps are encouraging steps.
Anand Bhushan, Partner, Shardul Amarchand Mangaldas (a leading law firm)Recognizing the strategic change in technology world, Finance Minister in his budget speech today for the F.Y. 2018-2019, emphasized on promoting growth of cutting edge technologies in digital space – machine learning, artificial intelligence, internet of things, 3D printing and the like.To harness more research and adoption of these technologies, the Government has increased the budgetallocation for foundational infrastructure to support these cutting edge technologies under the Digital India Program and will launch a Mission on Cyber Physical Systems. Government will also take steps to promote the development and use of ‘Fifth Generation’ (5G) technologies.To settle the dust for once and all regarding the crypto- currencies, particularly the Bitcoin, the Finance Minister today, announced that the Government of India does not recognize the non-fiat crypto currencies as legal tender.
Devita Saraf, Founder & CEO, Vu Televisions: I welcome the Digital India allocation in the Budget 2018. It is definitely a step forward towards creating technology enabled growth. The government’s push towards Make in India was also expected, which is why we have been prepared by working on this initiative at Vu Technologies.Vu supports the Make in India initiative and has been working on it since the government announced the increased custom duty on imports on TV as we are committed to offering the best price to our customers.
Aashish Kalra, Chairman of Cambridge Technology: In the Budget 2018, the Government announced efforts to enhance research in disruptive technologies like Artificial Intelligence, Big Data, IoT and Robotics. This will boost digital inclusion, innovation, manufacturing and create multi fold employment opportunities. Secondly, the reduction of corporate tax rate to 25 percent for companies with revenues up to INR 250 crores is a progressive step towards ease of doing business in India. This was a good step in the light of changing tax dynamics in the US. Lowering of tax rates will help India Inc. to remain competitive and lead to an increase in entrepreneurs.
Rajeev Sharma, Head-Corporate Services & Strategic Planning, Mitsubishi Electric India Pvt. Ltd: This seems to be a very balanced and cautious budget which is a good for all. Mitsubishi Electric is a global leader in social infrastructure and the focus of Government of India on infrastructure development is a welcome move excites us. The boost in allocation to infrastructure development like roads, railways, building airports will have far reaching long-term impact and Mitsubishi Electric would be willing to be an active partner in this growth and development story of India.
Arsalaan Kashif, Associate Director, Marketing – Happiest Minds: This is definitely a welcome move by the government as the ecosystem that supports cryptocurrencies is unregulated and highly speculative. A lot of people view blockchain and cryptocurrencies as two parts of the same coin which couldn’t be further from the truth. Blockchain is simply the underlying ideology which can be readily applied in various scenarios including payments to ensure greater transparency and decentralized control. Just like the internet in the 90s, the idea of blockchain is primed to be a game-changer and one can only hope that it’s used to create positive disruptions in the market place.
Sunil Sharma, Managing Director Sales for Sophos India & SAARC: With the rise in bitcoin’s popularity and a strong warning to act with “extreme caution” and understand the significant risks of choosing to invest in cryptocurrencies, it’s no wonder 2018-19’s budget has a special emphasis on taking measures to stop cryptocurrency circulation and explore the usage of Blockchain technology. Cryptocurrency is popular with cybercrooks and usually cryptocurrency is the end, rather than the means of the crime, for example, when crooks infect your computer with coinmining software to hijack your CPU to earn money, or scramble your data with ransomware and demand that you pay them in cryptocoins to get it back.
Nikhil Arora Vice-President & Managing Director, GoDaddy India on the MSME and small business sector. The budget this year focused towards “Ease of Living” & “Ease of doing Business” to strengthen agriculture, health, education, employment, MSME and infrastructure sectors”. It is good to know that our economy is on course to achieve over 8% growth. Government is recognizing the multi-faceted role played by the MSME sector towards encouraging the generation of self-employment with these tax relief and subsidies on custom duty. This year’s budget also saw a huge allocation of funds to the MSME sector to help them get started and continue to grow, this allocation comes as a big relief for the sector badly in need for such encouragement.
Byju Raveendran, Founder & CEO, BYJU’S – The Learning App: It is very encouraging to see the increased focus to further digitize education in India. Technology has just about started making an impact in education. A full-fledged intervention of technology in education will create a level playing field for students across geographies solving core issues like access to good quality content and teachers. The decision to move from blackboards to digital boards will change the way teachers teach and students learn and make learning an immersive and interactive experience. The right use of investment in the Indian education sector will provide an impetus to create an environment where learning is seamless for students irrespective of their learning proficiencies or geographical locations. Additionally, the focus to upgrade teaching skills will also play a vital role in the way young India learns. This will ensure and encourage students to love what they learn. Overall, if the planned investment is done in the right way, it will be a huge boost for the economy ,as it will create a the right set of talented workforce for India. And also, for most Indians, education is still the only way to make it big in life.
Rostow Ravanan, CEO, Mindtree: The budget balances the need for fiscal discipline against the political gains required in a pre-election year. We are happy to note the Government’s interest and budget allocations to areas like Blockchain, AI, and Digital. We are also interested to learn more about the largest social insurance scheme planned by the Government – this could be a large opportunity for using technology to deliver superior outcomes.
Simmi Sareen, Founder and CEO of Loans4SME:It is heartening that the budget recognises both the pivotal role of SMEs in fuelling India's growth and the contribution the fintech companies are making to help SMEs address barriers to their growth. Given the magnitude to the credit gap, estimated to be a staggering $400 billion, technology will play a key role in enabling the right credit for SMEs. We eagerly await the specific policy recommendations from the newly formed group at Ministry of Finance that will encourage the development of a robust fintech-led SME economy.
GB Kumar, Vice President – India and APAC at Prysm Inc: The one key takeaway from Union Budget 2018 is clearly the envisioned rise of India as a connected and technology-driven nation. There is a clear focus on creating a digital economy through sizeable strategic investments in developing the requisite infrastructure. With the government’s enhanced commit to the Digital India scheme – an allocation of INR 3,073 crore, and the successful selection of 99 cities (out of 100) for the Smart Cities initiative – we believe we will see expedited implementation of Connected Cities. Another commendable announcement was the allocation of INR 10,000 crore to the Bharatnet project and establishment of 5 lakh Wifi hotspots in rural geographies.
Varun Gupta, CEO, Goomo (travel startup): Good Budget, touching various sectors and providing impetus to rural, health care, employment and infrastructure such as highways, railways with focus on safety, smart cities and Digital India. In the travel and tourism space, it addresses to increase 5 times the current air handling traffic with a continued focus to connect current unserved 56 airports and 31 helipads under UDAN. Create 10 iconic tourist destinations and improve tourist amenities at 100 Adarsh monuments of the Archaeological Survey of India to enhance the visitor experience. Further, Corporates with the turnover of up to Rs. 250 crores will benefit with the reduced tax rate of 25%.
Abhishek Ray, Head- Legal, ePayLater (fintech startup): We are quite enthused by the budget speech by the Hon’ble Finance Minister. The acknowledgement of the presence and the potential input by the Fintech Sector and Startups to the Indian economy is very promising. We eagerly await the next steps of this Government towards creating the right environment for Fintechs and the support measures to be provided to VCs and Angel Investors to invest in Startups along with the introduction of hybrid instruments and other measures to support funding in Startups. We are very impressed by the forward vision of the Government to utilise technology to reduce the gap between rural and urban India by the implementation of schemes such as setting up 5 lakh wi-fi hotspots, enabling the connection of more eNational Agriculture Markets with the APMCs, support to Project Udan, steps for implementation of 5G adoption and implementation of AI by NITI Aayog for government services.
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.
Raja Lahiri, Partner, Grant Thornton India LLP: The government’s focus on Digital India initiative through measures planned to increase use of technology in Rural India, Education, Governance (e-governance), and Smart Cities continues. There is also a focus on artificial intelligence, robotics and block-chain technology which demonstrates the Modi government’s commitment to leverage new-age technologies. Further, the plan for re-capitalisation of banks through bond offering and merger of the state insurance companies, is aimed to strengthen the financial services sector in India.
Prof. Ashutosh Dash, Associate Professor, Finance, MDI Gurugram: The budget speech indicates government to focus on the rural sector to create more jobs by 2020. This will require more fund allocation towards the education sector and human resource development sector. The government should also continue creating the environment that ensures ‘ease of doing business’. This will lead to more investments by the private sector and create further jobs for the students completing their formal education.
Naveen Mandava, Co-Founder - IMAX Program: Budget 2018 comes with a positive outlook towards education. As outlined in the budget, getting students to the school is not a concern anymore but improvement in the quality of education is the need of the hour. The plan to devise a district-wise strategy, enhance teacher training and usage of digital boards is welcome. But it won't be enough. The National Achievement Survey shows that even in class 5, more than 50% of students were not able to do a simple subtraction of 555 minus 198. To be able to have macro improvement, we need to go micro. We should delineate the learning outcomes and have one-to-one follow up for each and every student. We at IMAX Program have been working to upgrade traditional classrooms to one-to-one classrooms where there is individualised feedback for students on every single learning outcome, and the results have been very encouraging. District-level tracking is a positive step, but we should fast move towards interventions that allow us to follow-up and improve every student.
Col. Rajendra Prasad Nadella, Co-Founder, Managing Director, iScholar: Education for once got due attention from the finance minister in the budget speech. Mr Jaitley acknowledged that technology will be the biggest driver in improving the quality of education. Among other major announcements are Eklavya schools in tribal districts on the lines of Navodaya schools, integrated B Ed, initiative for teachers training. Announcement of five lakh WiFi hot-spots in rural areas will enable access to high quality education to even even rural regions of the country.
Professor Madhu Veeraraghavan, Director and T.A. Pai Chair Professor of Finance,T A Pai Management Institute: The measures announced by the FM for the education sector will go a long way in helping scholars from IITs and IISc publish their work n top ranked journals. Currently, the quality of academic output is quite bad and the slew of measures announced by the FM – in particular, investment in research and the PM’S new initiative will certainly encourage scholars to publish their research in world class journals. This is the only way Indian Universities can even dream to enter the coveted top 100 World University Rankings.
Limesh Parekh, CEO Enjay IT solutions: Apart from other regular things, there are few steps which actually show the intent and vision of the government.1. Progress towards Universal Health System nationwide 2. MSME reforms and PM Mudra Yojana Wil enhance 3. Strengthening of railways and powerful agricultural policies will enhance and strengthen agricultural backbone of Indian economy. 4. Programs for preventing brain drain and BEd programs for technical teachers is a good step.