Budget Reactions - 3 ( last)
February 2 2020: It's a wrap: This is the third and concluding set of industry reactions to the Indian Budget 2020:
Debjani Ghosh, President, NASSCOM: Budget 2020 and the finance minister’s speech has well-articulated India’s vision on not just being a leading provider of digital solutions, but one where technology is the bedrock of development and growth.NASSCOM in its budget submissions and other proposals has constantly emphasized the importance of deep tech and innovation. The announcements on the Quantum Computing Center, Data Center policy, IPR portal, CoE will create the digital infrastructure for industry and government. One of the key asks from NASSCOM for boosting the start-up ecosystem was the issue of ESOPs and allowing scaled up startups to benefit from the tax incentives. It’s heartening that budget 2020 has simplified the ESOP policy and extended the tax incentives for up to 100 crore startups over a 10 year period. Incentives for MSMEs like audit exemptions for upto 5 crore companies will enable ease of business for small companies.The removal of Dividend Distribution Tax was a long pending request from the industry and will benefit companies that have global operations. However, the budget lacked focus on accelerating service exports from the country. The technology services sector has been a key contributor to India’s exports and GDP, NASSCOM had recommended that new investments by services companies in SEZs should also be eligible for the lower rate of 15%. Further, a future ready SEZ policy is needed and there was no indication of that in the Budget. Similarly, the focus on enabling more R&D solutions from India through specific programs was not covered in the budget.
Jitendra Chaddah, Chairman IESA: The vision for the semiconductor and electronics industry in the budget speech is encouraging. We feel this interim budget by Finance Minister is progressive and inclusive. It focuses on leveraging new technologies to build countrywide digital infrastructure, skill-building and drives growth by providing cost benefits for electronics manufacturing in India. The scheme to boost the intelligent electronics & semiconductor ecosystem by the manufacturing of mobile phones, semiconductor packaging and electronic equipment, assures more investment. We foresee the sustained incentives by the government to promote local manufacturing will fulfill local demand and also enable India to become an export hub for electronics.
Takayuki Inaba, Managing Director--NEC Technologies India: The current budget proposals exhibit a determined approach of government to make India ready for new technologies. Rs.6000 crore allocation for the proliferation of technology to the lowest level of society by connecting 1 lakh gram panchayats through Fibre to Home connections for supporting basic social infrastructure is a welcome step. The vision of providing panchayat level public institutions with digital connectivity will help streamline the integrated development work and open big opportunities for several stakeholders in the country. Proposal to develop Data Center Parks throughout the country is another major step towards digitization and capitalizing data resource available with government agencies.
Sanjay Gupta India Country Manager, NXP Semiconductors: Union Budget 2020 takes a pragmatic approach to spur sustainable growth by maintaining focus on core aspects of the economy. It’s a progressive budget that lays thrust on the sectors which will enable India’s economic growth. We are excited to know that the government aims to make India a manufacturing destination for mobile phones, electronic components and semiconductors and keenly look forward to a detailed policy for the sector as it can pave the path towards making India a major semiconductor hub in the coming times. We also welcome the budget allocation of Rs. 8000 crores for quantum computing, that can open up a lot of new opportunities and commercial applications in the future. The government’s focus on new-age technologies like Data analytics, IoT and AI and improvement of digital connectivity can help the country achieve its goal of becoming a $5 trillion economy by 2025. Extensive use of these technologies will enable stakeholders across tiers to make faster and more evidence-backed decisions leading to business growth
Vamsi Krishna, CEO Vedantu:The vision of making education accessible to the farthest corner of the country will greatly benefit students. The allocation of budget to hone the skill sets of teachers and educators will positively impact quality learning and thereby provide a boost to the education sector. Additionally the allocation of budget to BharatNet will also have a deep impact on skilling rural India as it has the potential to open up online learning to students and professionals from remote villages. With better bandwidth internet, a qualified teacher located in a metro city can impart LIVE online classes to students in small town India, where there’s a dearth of quality education. Technology will soon disrupt the entire concept of the classroom and make it an extremely personalized, one to one teaching-learning experience tailored for each mind.
Dhiraj Relli, MD & CEO, HDFC Securities: The FM has done well in abiding by the fiscal prudence principles for FY21 and the targets set by her look achievable. But it will be crucial for her to stick to it for FY21, else the international rating agencies may have adverse views. The markets have reacted negatively to the Budget, mainly due to some disappointments on account of non-abolition of LTCG, confusion about the impact of DDT removal and taxing dividends in the hands of recipients. Also the alternative provided to individuals for lower rate of tax, provided they do not claim exemptions/deductions, did not seem too attractive. The alternative tax system discourages investments which market participants do not seem to be comfortable with. The overhang of coronavirus outbreak on our markets also got magnified in the later half of the session. Foreign investors will look for signs of revival of growth before they commit funds.
Meghna Suryakumar, Founder & CEO, Crediwatch: The focus on enabling growth for MSMEs in today's Union Budget is encouraging. Enabling NBFCs to extend invoice financing to MSMEs through TReDS, should enhance opportunity to fuel the Indian economy and widen the acceptability and trust by the BFSI sector. The extension of GEM e-marketplace as a unified procurement channel should bring more vendors (from the current 3.2 lac) onto the platform. Additionally, amendments to Factor Regulation Act 2011 should boost the MSME sector. On the Debt Recovery side for lenders, the allowance to smallers NBFCs to approach the DRT for smaller ticket size loans, would be beneficial in lowering NPAs & improving the asset quality. However, we expected to hear more clarity on the scheme to provide subordinate debt to be provided by banks for entrepreneurs of MSMEs since less than 15 % of the 50+ million Indian Small businesses have access to formal credit and there is a debt financing gap of the SME is over $1 Trillion.
Sunil Patwari, CEO, Rashmi Rare Earth: We laud the budget presented by Ms. Sitharaman today. She stated that the Government could announce a Rs. 36,000 crore fund to provide production linked incentives (PLI) to smartphones makers. Building a complete ecosystem to spur local manufacturing is the key for its success. This scheme will support the manufacturers to offer quality products at competitive prices, generating ample employment opportunities and boosting the domestic economy. Our request to the Government to give preferential treatment to Indian companies having 100% local equity over their Chinese counterparts. Faster and hassle free implementation of Incentive Schemes is the call of the hour.
Rahul Sharma, MD-India, LogMeIn: Budget 2020 looks very promising. We are particularly enthused about the FM’s announcement of seamless delivery of digital services as part of the next wave of digital revolution. AI, ML, Analytics, IoT, Robotics are making giant inroads in India, as was observed in the budget. The policy being introduced to build data centre parks throughout the country will help enhance the digital infrastructure to a significant extent. We are looking forward to the next phase of Digital India which will be a big growth driver for businesses and individuals alike
Rakesh Kharwal, Managing Director, India/South Asia & ASEAN, Cyberbit: The government has highlighted the role of digital technologies like analytics, IoT, AI, and quantum technology during this Budget Session. The burgeoning digital infrastructure of India needs a strong cybersecurity framework to support it. Now, since it has allocated Rs. 99,300 crores to the education sector and Rs. 3,000 crores for skill development itself, a good way to realize India's digital vision could be by working on the cybersecurity front from the very beginning. The government may want to cover its tech initiatives with avant-garde simulation-based cybersecurity training platforms like Cyber Range for proposed cyber forensic university and Skill India campaign. This will help India in generating millions of jobs for the youth and also strengthening national security.
Suganthi Shivkumar, Managing Director, ASEAN, India & Korea at Qlik: We appreciate the government’s decision in the 2020 Budget to dedicate the necessary funds and resources towards developing revolutionary and breakthrough technologies such as ML, robotics and AI to further the skills that will prepare us for the next wave and accelerate India’s journey towards becoming a digital giant. With data equated as the new oil, the government’s plan of building cutting-edge data parks across the country is equally important. Furthermore, the governments initiative of allocating Rs 6000 crores to enable unabridged digital connectivity in over 100,000 Gram Panchayats through the Fiber to Home BharatNet scheme holds brilliant potential in securing India’s passage towards achieving tech-empowerment for the remote sector.
Alok Bansal, Managing Director, and CountryHead, Visionet India:The focus on cutting edge skills and technology like AI, IoT, 3D printing etc. will have a long term positive impact in terms of skill and competency development of Indian IT/ITeS companies.
Rajiv Kapoor, Vice President, India & SAARC, Cambium Networks: The Union Budget provides a major boost to the interests of broadband services enablers and aligned stakeholders as one of the major takeaways that evidently emerged was the fact of connectivity being at the core of all key pursuits planned by the government. Towards this, initiatives announced such as providing push to smart metering, setting up five new smart cities, establishing new data centres across the country and more importantly the allocation of Rs.6000 crore towards BharatNet to provide connectivity to 100,000 gram panchayats within this year itself, augers well for the telecom industry.
Trishneet Arora – Founder & Chief Executive Officer, TAC Security: Union Budget 2020 announcements by the Finance Minister Ms. Nirmala Sitharaman just a while ago are beginning to bring about more confidence in the development of the Cyber Security sector in India. With the allocation of Rs. 8000 crore for the National Mission on Quantum Computing and Technology and an indication at the opening of Cyber Forensic University, the govt. ‘s proposition for digital penetration to make FTTH accessible to 10 lakh Gram Panchayat via Bharat Net will help position India against global leaders in the sector. This will give a big boost to the cyber security industry.
Srikanth Iyer, CEO & Founder HomeLane.com: It is a delight that the Government has considered to encourage start-up owners and entrepreneurs by creating more opportunities, to help towards the clearance cell of investment. Additionally, the proposal on deferment of tax payment by employees on ESOPs to minimum of five years will be a great support especially the aspiring young professionals. The focus on technology including AI/ML, robotics with number of productive age group cross-cutting streams in India is another exciting development. Further, the Government’s efforts to boost income and purchasing power, reflects well on the income tax. However, the fleeting mention on SOPs to boost real estate and affordable housing did not provide clarity. Entitlements for real estate and housing is extremely essential, especially for new homebuyers and those who want to set-up their homes
Vikas Garg, Deputy CFO, Paytm: We see this budget as a good step in direction to become a $5 trillion dollars economy. As a technology player embedded in India’s technology ecosystem, we welcome the government’s vision to build Data Centre Parks in the country. The government’s focus on enhanced digital connectivity, and focus on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to India’s economy.
Prashant Agarwal, President, Narayan Seva Sansthan : 2020 Budget allocation for healthcare (Rs 69,000 crores) and skill education (3,000 crore) is good start to build the future of New India.But 2.68 crore differently abled in India need more special attention for working on overall health and literacy standards for the betterment who are suffering from the basic needs . As Corporates and rising startups need to increase the scope of CSR spending to actually bring some noticeable positive social change for differently-abled. NGOs like us are investing in the best possible way to strengthen the support system in rural, urban and semi-urban India by running campaigns on ground without any major financial support. It is high time to support and think more from the perspective of differently abled’s for shaping their future with mainstream society.
Vijay Dewan, Managing Director, Apeejay Surrendra Park Hotels Ltd: It's a balance budget , where Government has taken measures by allocating Rs. 2,500 crores for tourism promotion in FY21 in order to support the Incredible India initiative. The vision of government to invest in the tourism sector will be a great push for the hospitality sector. India's heritage and culture rich experiences have always attracted tourists to the country and government's plan to develop five archaeological sites at iconic sites with on-site museums will attract more tourists in India and globally. The plan to develop 100 new airports will significantly help in building tourism infrastructure and will drive tourism growth.
Anish Kapoor,CEO Infinix India: We welcome the Union Budget 2020 announced by the government as it proposes a scheme focused on encouraging the manufacturing of mobile phones and electrical equipment, this will further give a boost to government's Make in India programme.
Rishabh Mehra, MD and CEO, Digital Mall of Asia : We welcome the Union Budget 2020 announced by the government as it will boost startups, tax burden on employees due to tax on Employee Stock Options to be deferred by five years or till they leave the company or when they sell, whichever is earliest.
Dr. Pulkit's Mathur CEO & Co-Founder, Queppelin, leading provider of Augmented Reality & Virtual Reality (AR/VR) applications: It was heartening to see FM Sitharaman recognise the importance of Deep Tech is driving the next wave of growth in India. From AI in Ayushman Bharat to Data Centre Parks to allocation of Quantum Tech....there was enough in that Budget for the Technology sector to be enthused about.
Pathik Shah, CEO of DB Digital: Promoting and building data center parks across India and improving connectivity through BharatNet seems like a great move forward - it would be great to leverage both to enable seamless interchange of data across local government bodies and also enabling access to it to private companies to build innovative applications leveraging that data - just like the data.gov initiative by the US government; and that could also help drive data localization forward - depending on the specifics.
Raj Padhiyar, Founder & CEO, Digital Gurukul: The focus area of education in this year’s budget under the theme of “Aspirational India” oriented towards 3 key areas: improving the quality of education, promoting digital learning & skill development to address high unemployment rate“ FM was expected to announce revolutionary measure in building the new Digital Education ecosystem to promote futuristic skills & combat high unemployment rate - But No major announcements of schemes/policies were made regarding the same.
Arjun Bajaj, Founder of Shinco India, Brand by Videotex International: The reduction of income tax in the slabs below 12 lakhs will definitely increase the disposable income of the consumers hence resulting into an increase in the overall sales across industries which will further improve the economic conditions of the country. We were expecting the government to take action on the 0% open cell duty structure which could increase post-September due to no manufacturing/bonding plants of open cell in India. An extension in 0% duty is needed due to no local manufacturing.
Vikram Kumar, Co-founder, Letstrack: As said in the budget, IoT and AI are changing the way of the working of the economy and our focus needs to be on the same.Our new digital economy is based on innovations which is going to disrupt the established business models.Setting up of an investment clearance cell to support the startup owners in funding is a welcome step.Investment Clearance Cell will give investors free investment advisory, land banks and facilitate clearances even at state level.A pan-India single-window clearance system for investments will improve the ease of doing business in India.The new budget is going to be helpful for early-stage startups as they would be providing the early-stage funding including the seed funds and it is going to bring in the ideation and development.
Akshay Singhal, Founder, Log 9 Materials:At the outset, budget looks to balance aspirations and shortcomings. For Deeptech entrepreneurs like us, budget presents a clear national intent towards greener environment and renewable energy which is commendable and much appreciated.
Dr. Vivek G. Mendonsa , Director-Sales LYNX_Lawrence &Mayo: The budget 2020 is a holistic and integrated budget, focused on promoting the ‘ease of living’ for a common man and ‘ease of doing business’ for SMEs, MSME’s and corporate. With a clear thrust on projects that work keeping sustainability and optimum use of resources in mind, the budget outlines plans to strengthen infrastructure relevant for renewable energy, transport, IT and agriculture, and allied industries. Further, a plan to offer employment opportunities to India's young engineers, management graduates, and economists, in construction, operation & maintenance of infrastructure through the 'Project Preparation Facility’, and the mandate for urban local bodies will provide internships to engineers for one year at district and state level, the budget displays a long term vision to make India a youth-led economy.
Ritesh Jain - Co-Founder at FlexiLoans.com: Nirmala Sitharaman has presented a holistic budget and it is an extension of ambitious schemes announced by the government for doubling farmers' income, infra boost, etc. This instills confidence in the industry that the government is serious about its programs and deadlines. If these schemes are successfully executed it will put the economy on a growth path and create demand in the economy. This budget also supports MSME focused Fintechs by (i) extending provisions of subordinated debt to entrepreneurs focused on MSME’s, (ii) extension of provisions CGTSME scheme, (iii) mechanism to solve for liquidity crunch for NBFC’s and (iv) allowing NBFC’s to participate on Treds.
Akshay Chaturvedi, Founder & CEO, Leverage Edu: It’s great to see the Union Government’s focus on education. The FDI part was in waiting for a long time, glad to have it come through - it will really help us make a big leap! Online education programs, introduction of new courses that will push students into careers of tomorrow, and of course ‘the Indian SAT’ for promoting #StudyInIndia - all are in the right direction, and I am personally very excited about us at Leverage Edu helping execute some of these parts.
Kunal Jain, Founder & CEO, Analytics Vidhya:I welcome the Government’s initiative to open Data Center Parks across the country as the finance minister has rightly said that ‘Data is the New Oil’. This will lead to the digitisation of the rural areas while providing various employment opportunities to the people across the country. Also, I would appreciate the use of AI & ML by the government in Aayushman Bharat Scheme to improve the healthcare services and eradicate tuberculosis in India by 2025
Archit Gupta, Founder, and CEO, ClearTax: The complex tax regime for taxpayers with the slabs rejig. With the optional new regime, taxpayers will have to evaluate what works better. Those committed to long term saving and investing via 80C may be discouraged and this may likely demotivate taxpayers from tax-saving linked investing.
DDT removal is good as it increases dividends received in the hands of the taxpayer - however, such receipts to now are taxable in their hands. Those above 20% tax slab - will now face more tax on their dividend income. We welcome deferment of perquisite taxation - now taxation at the time of 'exercise' deferred to 5 years or till they leave the company or till they sell their shares - whichever is earlier. This will be a key plank for hiring quality resources.
Sadiya Khan, Founder - Akund Communications: According to a recent report by World Bank, despite making up 48% of the Indian population, women have not benefitted equally from its economic growth. 65% of women are literate compared to 80% of men.Budget 2019-2020 did not have much to offer to the Indian women but this year the Finance Minister Smt. Nirmala Sitharaman has allotted of Rs. 28,600 cr for Women-Centric programmes in FY21 which will be deployed for schemes like Beti Bachao Beti Padhao, Mahila E-Haat, Working Women Hostel, Mahila Police Volunteer, NIRBHAYA, SWADHAR Greh and other such schemes. This will encourage women to come out, educate themselves and become independent, increasing women workforce in the country.
Siddharth Jain, Co- founder,Vaahika: Personal income tax deduction is a big plus given by the FM, this will help in growth revival. The increasing turnover threshold limit to 100 Cr and tax benefit time period to 10 years is another big push for startups. Also, Deferring tax on ESOP's for startups is a big positive move that will help small startups in retaining talent. The increasing tax audit minimum turnover limit from the current 1 Cr limit to 5 Cr will benefit a large number of small and medium enterprises.
Atul Rai, Co-Founder & CEO of Staqu: We appreciate the government’s emphasis on promoting cutting-edge technologies in India. In her Union Budget 2020 announcement, the FM observed that technologies like machine learning, robotics, AI, along with number of productive age group (15-65 years) are cross-cutting streams in India, which is a special attribute for our country.While the government had previously set up a national portal for AI research and development, in the latest announcement, the government has continued to offer its support for tech advancements. The same is reflected in the Finance Minister’s promise of releasing a policy for the private sector to build data centre parks throughout the country and proposing INR 8,000Cr for over 5 years for National Mission of Quantum Technology and Application. At Staqu, through our continuous efforts on leveraging AI to meaningfully process data in the form of images, text, speech, etc. we look forward to supporting the government and helping India take the next leap in advanced technologies.
Ravi Goyal, Chairman & MD, AGS Transact Technologies: The removal of dividend distribution tax will reassure the flow of FDI and make Indian equities more attractive. This year’s budget focused on entrepreneurship and early stage start-ups and the FM has provided a series of measures, that will encourage Indian start-ups whilst focusing on positioning entrepreneurs as job creators. The overall focus on boosting transport infrastructure will help pursue greater commercialization of highways to raise finance operating road assets. Recent developments to promote digital payments such as zero MDR are pre budget announcements and there was an expectation of a clear roadmap from the government on supporting digital payments infrastructure given the sector will be a major catalyst towards achieving the $5.5 trillion target
Yash Rane, Founder, Chizel: Budget 2020 looks promising from startup point of view. Also, Reducing taxes will really help spending power of common man thereby increasing cash flow in the market. However, it does not address the slow down in the market. We have not seen any aggressive measures that could promise USD 5T dream of Indian Economy.
Dipesh Kaura, General Manager, Kaspersky (South Asia): Government's growing interest in the use of Advanced technologies such as Artificial intelligence, quantum computing, etc was definitely seen as the base of the IT budget for 2020 and an interesting move for Digital India.In today's budget we saw the government allocating funds to make data centers across India which will also support their upcoming Data Protection Act. However we do hope that this budget will be majorly focused on protecting the stored data especially of sectors like BFSI and large enterprises that consist major quantity of critical data.
Venkatraman Swaminathan, Vice President & Country General Manager, Schneider Electric IT Business India: As per Union Budget 2020, the allocation of INR 6,000 Crores for BharatNet to digitize 1 lakh gram panchayats is a step towards making India digitally more connected. These new initiatives will help improve telecom and internet services in rural and remote regions of India. Digital India initiative will see a new wave as citizens in deeper pockets will gain further access to services like e-governance, e-health, e-education, and e-banking amongst others. In addition, the announcement of allowing private sector set up data center parks across the country will help in data localization and protection. We welcome the government’s decision in announcing additional Smart cities in building a robust digital infrastructure. This also aligns with the Internet of Things (IoT) taking over the lives as automation has made lives simpler and buildings smarter. Schneider Electric is committed towards working hand in hand with the government of India in this digital transformation journey.