Bangalore, July 72019: Concluding our compilation of reactions to Budget 2019:
NASSCOM: SEZ BENEFITS ARE A MISSED OPPORTUNITY
The budget presented today sets the right vision for the envisioned roadmap to achieve the USD 5 trillion economy goal. However it needs to provide the next steps in details for the realization of the vision. One of the key asks from NASSCOM, was towards building skills for new age technologies, which we believe is critical for our success in the Digital era. The government’s intent to enhance digital skills is a huge step in the positive direction. We applaud the government for recognising this as the need of the hour, and committing to train 10 million young professionals in emerging fields like AI, IoT, Big Data, Robotics and 3D printing. We will work with the government to understand the implementation process for the roll-out. One key exclusion in the budget was a conducive policy for Special Economic Zones, leaving it as a missed opportunity for India as other countries continue to provide benefits to enterprises. The SEZ benefits shall end in March 2020 but there is no clarity on the new SEZ policy or an indication of what is to come.
The Economic Survey had clearly called out the need to focus on large companies to achieve the USD 5 Trillion dream, and NASSCOM believes that on this count the budget falls short. A consistent ask from the industry has been a forward looking SEZ policy to strengthen India’s position as a global hub for IT Services. This sector contributes 7.9 % to the GDP and is one of its largest contributors, and creates around 4 Million jobs, hence a lack of incentives will impact India’s image as a destination.
The budget also focused on the growth of our Startup Ecosystem, announcing that funds raised by start-ups will not require scrutiny from any tax body thus ensuring there aren’t any hindrances in their overall development. This has also been a constant ask by NASSCOM and the industry, and the clarity on Angel Tax is a welcome step to further evangelize the start-up community. A new television channel to allow start-ups to promote themselves as well as make critical connects with VC networks to raise funding, will further build the community.
It is also commendable to see that ease of doing business has been a focus for the Government over the past few years, this is echoed in this year also with proposals in the budget aimed at reducing taxation, as well as creating opportunities on MSME’s. The Digital infrastructure too will witness several upgrades with cashless payments, income tax automation as well as R&D in agriculture. It was also good to see the adoption of Electric Vehicles being encouraged with GST being reduced and IT exemption on loans for them also being mandated.
Suman Reddy, MD, Pegasystems India
The main objective of the Budget as set by the Finance Minister is to set the groundwork for PM Modi's aspiration of a $5-trillion-dollar economy. Arguably, one of the biggest beneficiary of this vision would be the technology industry. Following up from technology-related announcements during the interim budget including a national AI-centre and the Digital India vision, the government has acted on additional expectations from the sector. The elimination of excessive scrutiny through the angel tax through an e-verification process will improve the trust factor in valuation activities. Also, the government has put the first step forward with skilling focus on emerging technologies like artificial intelligence and robotics. However, the government has not elaborated on the latter, further to NASSCOM’s recommendations to show its commitment with an initial fund of Rs. 500 crore, and incentivize corporates to skill training by promoting spending. We also welcome the government’s move to allocate 25% of corporate taxes by increasing the ambit of companies from Rs. 250 - 400 crores of turnover. This will allow spending and boost the economy, while driving returns for the government.
Arijit Biswas Co-Founder at EnrichAI
We feel that Budget 2019 will foster the startup ecosystem in the country by encouraging different stakeholders including entrepreneurs, investors, talent and consumers to participate in a more spirited manner. While the government’s push to skill India’s youth in cognitive technologies will help startups source talent easily and big pocket global R&D teams, setting up of a dedicated TV program for and by startup founders will provide a cost-effective medium to entrepreneurs to demonstrate innovative ideas and gain mind share of the mass. The announcement to relax scrutiny of the tax returns filed by founders and investors will allow the startup ecosystem to focus wholly and solely on innovation and value creation, and not get bogged down by administrative procedures.
KT Prasad, Country Sales Director, Zendesk India
This is a forward-looking budget designed to accelerate commerce by encouraging foreign investment while also giving local home-grown businesses a leg up, and propelling job creation are encouraging steps towards boosting India's long term economic growth. The impetus on improving youth skills in disruptive technologies like Artificial Intelligence (AI), Internet of Things (IoT) and robotics reinforces the government's efforts towards building a Digital India. It is also encouraging to see initiatives that will boost India's standing on the global technology stage, such as establishing National Research Foundation (NRF) to promote research in AI, accelerating the Standup India program for budding women entrepreneurs, easing FDI rules, and proposing a host of enhancements to the digital payment systems among others. Businesses in India - large or small, new or established - are well-positioned to harness these opportunities by breaking free from outdated legacy technology and infrastructure and adopt more agile, scalable technologies that will empower them to achieve rapid growth. I would give this budget a thumbs up.
Nikhil Arora, Vice President and Managing Director, GoDaddy India:
We welcome the Government of India’s Union Budget 2019 that promises an all-round and inclusive growth of the country. The reforms presented in the Budget 2019 reiterate government’s commitment to foster a friendly environment for small businesses, women-owned MSMEs and startups. While steps like exemption of scrutiny on angel taxes, e-verification of taxation and dedicated TV channel for the startup community, will help bolster the spirit of entrepreneurship in the country; the government’s increased focus on providing better incentives to women entrepreneurs is a commendable initiative. The Budget also offers big slew of reforms for the MSME sector such as creation of payment platform for filing bills, easy access to loans up to INR 1 crore within 59 minutes and credit boost through INR 350 crore interest subvention - all of which will encourage more people to start their business journeys. With India poised to become a $3 trillion economy this year, we at GoDaddy, are committed to continue working with the government and our partner ecosystem, helping entrepreneurs and small businesses to successfully grow their ventures online, with our easy-to-use and affordable tools and solutions.
Ajay Piramal, Chairman, Piramal Group
The Union Budget 2019 is marked with a long term 10-year vision while retaining focus on the immediate priorities. The government’s roadmap to position the economy for future sustainable growth will resonate with both domestic and international stakeholders. India now approaching the global markets to raise sovereign debt, indicates the country’s readiness to be sized amongst the best in the world. This is a huge vote of confidence in the economy and its trajectory.The focused impetus for sustainable job creation via targeted investment in infrastructure projects and other productive sectors of the economy, will have a cascading effect on secondary and tertiary employment. The mission to provide housing for all by 2022 has the potential not just for growth in downstream sectors such as cement and steel but also for overall job creation in these crucial industries.We are happy to see the government signal its confidence for a well-financed, robust NBFC sector through the one-time six-month partial credit guarantee. This development would be an important milestone for the NBFC sector that is crucial for the sustained growth of the economy. We welcome the regulations and norms that have been proposed by the Finance Minister on the NBFC sector that would raise transparency and reinstate trust in this vital sector.
Surojit Shome, CEO DBS Bank India.
The Union Budget reiterates the Government’s intent to accelerate digitisation in the economy. Incentivising digital transactions through measures such as a 2% levy on cash withdrawals from bank accounts above a cumulative one crore per annum threshold and reduced merchant discount rates can structurally change adoption levels. Additionally, encouraging measures for start-ups should boost digital entrepreneurship as well as efforts to increase digital literacy particularly in rural India will strengthen the Digital India transformation process.