March 1 2016: Reactions to the tech industry has been generally polite if not too enthusiastic. We bring you the first instalment:
NASSCOM has welcomed the Union Budget 2016, while terming it as a mixed bag for the sector. The budget reiterates the 7.6% GDP growth rate for the country and provides a slew of incentives for the rural, agricultural sector to enable inclusive growth.The annual budget proposals set the policy direction for the country and Budget 2016 does articulate the emphasis on accountability, transparency and governance. However, in the backdrop of global economic volatility, there are unmet expectations on policy announcements that enable ease of doing business for our sector. Mohan Reddy, Chairman, NASSCOM said “Our wish list for Budget 2016 included three key priorities – policy bottlenecks including ease of business; nurturing start-ups, products and ecommerce sector; and clarifications on transfer pricing to enable inward investments in India. Budget 2016 only partially covers these priorities. Extension of Section 10AA for SEZ units till 2020 is a positive outcome though the imposition of MAT on startups will not allow the full impact of the benefits to be realized”
M N Vidyshankar, President IESA: Government has shown great intent in promoting the start-up ecosystem in India. With Government's announcement to promote women entrepreneurship, and entrepreneurship in the SC/ST category, we will have an immense role to play along with MSME in making this initiative successful. We are honoured with government's trust on associations like IESA and look forward to work in tandem to realise this socially important goal.Investment exists in start-ups in two years qualifies as Long Term Capital Gains and this encourages angel/venture capital infusion. Further, the simplification of norms for forming a company along with 3 year tax holiday will spur entrepreneurs to establish start-ups. This reflects the commitment PM Modi made during the Start-up India Action Plan on Jan 16th. We are happy with Government’s initiative to boost local manufacturing and the start-up ecosystem in India, with their decision to allow rebates to the SMEs and also 100% deduction of profits to the start-ups.
Manish Sharma, President CEAMA and Managing Director Panasonic India and South Asia.:The Indian economy is growing at a rapid pace despite the global slowdown. The Finance Minister has clearly highlighted the growth pillars of the Indian economy in Agriculture, Rural, Social sector, Skills, Ease of Doing Business and Tax and Compliance reforms. We are happy with the government impetus on Make In India by providing tax and duty benefits and these will go a long way in strengthening the manufacturing capabilities of India. Another important milestone has been the use of technology to increase accountability of the government, authorities, and courts is a welcome step and will provide the right fillip to fast track procedures and will become the growth engine of the country. Skilling of youth of India by way of multi-skilled training institute and MOOCS will go a long way in tying the India growth story with the demographic advantage of India. Like always, we will continue supporting the government in its endeavour to fast track growth
Samay Kohli, CEO, GreyOrange: We wholeheartedly welcome the Government of India’s reiterated focus on initiatives like ‘Digital India’, ‘Make in India’, and ‘Skill India’ through the union budget 2016. Looking at a 6% plus GDP growth target in the coming year, the manufacturing sector will play a very important role. Since the success of manufacturing significantly depends on optimizing supply chain processes, 'Make in India’ will open doors for technology innovations in the industrial automation and supply chain management space. We also welcome the finance minister’s proposal of the special patent regime with 10% tax on income from worldwide utilization of patents developed and registered in India. This step will encourage technology innovation and development in the country. We urge the government to simplify the process further. This will help in nurturing the culture of innovation in the country, and unleash a lot of latent talent."
Vivekanand Venugopal, Vice President and general manager, Hitachi Data Systems, India: We welcome the measures introduced as a part of the Union Budget for 2016-17. The budget has laid the groundwork to create more opportunities for education, skill development and job creation in the country. One of the major aspects of the budget announced is that technology will be used in all spheres, starting from tax and markets to data mining and more with the help of a better IT systems. The focus on enhancing digital literacy in rural areas to cover 6 crore additional rural households is a well thought move by the government to transform and deliver growth with increased connectivity across the country.
Jatin Paul, Co-Founder Modspace.in: We give a thumbs-up to the Budget – It has all the ingredients to push the Start-Up India and Digital India initiatives that have been the Govt.’s much talked of programs. Focus of the FM towards promoting entrepreneurial spirit among women and the initiative to give Skill Development the much needed Budgetary support will help innovative ideas and ventures see the light of the day, in addition to creating new job opportunities".
Major Prashant Rai, Founder and CEO, Onetimejobs.com: We welcome budget 2016 announcements by the Finance Minister. The government has rightly addressed the needs of different sectors. Tech-savvy, educated population and skilled labour is the need of the hour. We particularly admire the skill development initiative to boost Make in India. To give a boost to government’s Make in India initiative, the country needs to skill its unskilled labour and reform the entire manufacturing sector. If manufacturing productivity is increased to a higher level, share of manufacturing in all the states will also be increased in return. Also, government has rightly emphasized its focus on online courses for entrepreneurship, investments on women and SC/ ST as this will enable young startups to prosper and lead to additional jobs creation.
Mritunjay Singh, COO and Executive Director, Persistent Systems: The budget presented by the Finance Minister is well-balanced. Particularly with respect to the global economy this last year, it’s commendable that the fiscal deficit is maintained at 3.5%. It’s heartening to see the impetus this budget intends to provide to the rural economy and the importance given to social security. The budget has been in alignment with the government’s vision of making the environment for business much more conducive and encouraging the rising entrepreneurial spirit amongst the Indian people.
Shekhar Sanyal, Director and Country Head., Institution of Engineering and Technology: The Union budget for the year 2016-17 is a pragmatic and progressive effort with education rightly being listed amongst the ‘9 critical pillars’ identified by the FM this year. The enhanced focus on skilling and encouraging entrepreneurial tendencies with the scheme to provide Rs.500 cr for promoting entrepreneurship among SC/ST citizens is a welcome step. The large outlays for skill development will resonate with urgent need of employability among India’s youth. The higher education sector which has been craving for some attention from the government will receive an impetus with a Rs. 1,000 crore financing and 62 new navodaya vidyalayas, and 20 educational institutions to be made par world-class standards.
Ashraf-el-Arman, MD, Xerox India: The Government plans to establish a digital depository of School Leaving Certificates, College Degrees, Academic Awards and Mark sheets for easy access for students, institutions and employers. With our expertise in document technology and services offerings, we believe there is an opportunity for us to collaborate with the government, institutions and employers and work with them in the vision of creating a digital repository in India.
Sean Blagsvedt, CEO and Founder, Babajob.com: We are delighted with the government’s decision to skill one crore youth over the next three years. Broad based education is key to any country goals of increasing productivity and salaries for all citizens; India recognizes that digital literacy must be a part of that education too. Towards that end, we strongly support the two schemes announced for digital literacy to cover six crore households in rural India and look forward to everyone being able to leverage their skills and digital literacy to improve their livelihoods.
Pardeep Jain, Managing Director- Karbonn Mobiles: With Karbonn’s focus on indigenous manufacturing employing local manpower and skilling them, we are very happy to be an active contributor to the government’s Skill India initiative. However, the withdrawal of BCD, CVD and SAD exemption on mobile phone chargers, adapter, battery, wired headsets and speakers for actual manufacturing is disheartening and is likely to stifle the growth of Indian Smartphone players and impact their price competitiveness. The parts and components ecosystem in the country is still in its nascent stage. While the incentives on local manufacturing announced in the previous budget were welcoming, government should have allowed for a gestation period for local handset players to strengthen their manufacturing capabilities before withdrawing tax exemptions on completely built units.
Tamaal Roy, CEO- Biomatiques Identification Solutions : This time around, in the Union Budget 2016-17, we witnessed a pleasant surprise as the government announced the introduction of 4 new projects for the welfare of dairy cattle in India.With schemes like “Pashudhan Sanjeevani,” “Nakul Swasthya Patra,” “E-Pashudhan Haat” and “National Genomic Centre” for indigenous breeds it looks like we are heading in the right direction.Another interesting point was the government’s move to go for automation of 3 lakh fair price shops across India. This is where our iris technology can come into play as it will eliminate the mal practices which have been happening since the past so many years. With the “Make In India” wave which has already picked up pace, our Indian made iris scanners will play a major role in providing cutting edge solutions for security and automation in ration distribution."
Mrigank Tripathi, Founder and CEO, Qustn Technologies: The Union Budget seems to be primarily an Agri budget, and a good one at that. From a startups perspective, little seems to have changed. Although great emphasis was laid on the ease of doing business, in my view the budget does not entirely meet the much hyped up expectations that were laid out by Prime Minister Narendra Modi in the Start-up India Action Plan event. There was an expectation to see more initiatives to boost the startup eco-system and showcase ease of doing business initiatives, especially in the current environment. The Companies Act will be amended to enable setting up of start-ups in a day but this was already spelt out in January. There are a few positives such as (a). Allocation of Rs 500 crore fund under the Stand Up India scheme for SC, ST and women entrepreneurs; while this almost seems like reservation of funds based on caste - I hope that it gets more meaningful entrepreneurship to the fore. (B) a revised ceiling for presumptive taxation scheme, a raise for income from Rs 1 crore to Rs 2 crore to benefit Start-ups, (C) a Tax holiday announced for start-ups for 3 of 5 years of setting up a start-up will help the ecosystem - but not push existing startups to become profitable and (D) a reduction in the period of getting long term capital gain from unlisted companies from three to two years - though the tax rates haven’t been changed.
Rajesh Agarwal, Co-Founder, Micromax Informatics: The growth focused Union Budget 2016-2017 is announced in the light of stressed global slowdown, yet it is heartening to see how the growth has accelerated to 7.6% and the CPI inflation has come down to 5.4%. Union Finance Minister had a herculean task cut out to meet the raising expectation from industry leaders and the aam aadmi as he presents his third general budget. The Budget 2016 outlines the government’s commitment to reinvigorate the economy, kick-start investment cycle and also maintain fiscal prudence, but it remains to be seen on how quickly would we see the impact in execution.
Saurav Kumar, CEO & Co-Founder, Cube26 It is encouraging to see the government’s continued focus to boost start-ups and entrepreneurs in India. The “Stand Up India Scheme” to promote entrepreneurship with a dedicated Rs. 500 crore fund is a welcome move. The government’s initiative to amend the present Companies Act to enable registration of the companies in one day is commendable. The policies announced regarding ease of doing business provide a supportive ecosystem for the growth of start-ups.While, the union budget 2016 has announced lowering of the corporate tax for new manufacturing units incorporated on or after March 1, 2016 at 25 per cent with a view to promote industrial activity and generate jobs, we were expecting a robust approach to incentivize Indian device manufacturers.The special patent regime with 10% rate of tax on income from worldwide exploitation of patents developed and registered in India is a step in the right direction to boost innovation.
Govind Rajan, COO, FreeCharge: Fair price shops are lifeline of India, especially in tier 2 and beyond markets. Government's proposal to automate 3 lakh Fair Price Shops is a great step towards the overall Digital India agenda. This will streamline the processes within these shops and will make it easier for consumers to make purchases. We are also excited to see Government's push towards research & innovation and 80% discount on filing patent applications by start-ups will further see new home-grown innovations coming from start-ups.
Keshav Bansal, Director, Intex Technologies: With a great emphasis on the nine pillars of economy in the FY16-17 Union Budget, the Finance Minister has made a commendable effort towards creating a robust path for the future. We are happy that the budget has walked the talk for Make in India by proposing changes in the customs & excise duty structure in components and sub-components to give fillip to the creation of domestic mobile component ecosystem. The skill development push is another positive as the market demanded and industries have been desperately searching for.
Piyush Agrawal, CEO & Founder, SuperProfs: The 100% tax deduction for new startups is a very good move on the part of the Govt. This will greatly help a number of start-ups that have not raised external funding and are bootstrapping. This will enable them to conserve cash to sustain their operations. Till now, such companies have had to pay tax on their profits. This initiative will allow them to invest back the profits for growth of the company.
Anurag Avul, CEO Shopmatic: It’s great to see reforms being proposed in favour of entrepreneurs, not only in urban India but in all parts of the country. The move for forming the National SC/ ST Hub with the Ministry of Micros SME to support SC/ ST entrepreneurs, is heartening to see.It's also great to see that the Special Patent Regime proposed to power innovation and research has been initiated, which further fosters the country’s creative spirit.
Vinod Murali, MD, Innoven Capital: Given the enormous debt burden on Indian corporates, measures which help in improving overall credit health of the economy are welcome and the Finance Minister’s move to hold the fiscal deficit targets at prior levels despite pressure to allow for growth, should be commended. This was not a budget with high expectation of drastic reform and many of the announcements have been tactical or to improve efficiencies. There is more sensitivity to entrepreneurship which is a good start but this area needs more attention in the years to come.
Sumit Sood, MD, GlobalLogic India: We welcome the Government’s plan to launch a mission to provide Digital Literacy for rural India, as it is a very forward looking move. One that will take the country closer to the goals of Digital India. The drive which will bring about 6 crore rural households under the umbrella of being digitally literate in the coming three years is definitely going to put India on the road to becoming an economic power. In addition, the move to create a digital repository for all school leaving certificates and diplomas will give the education system an edge it had hitherto lacked. Moving away from a paper-dependent to a digital-led system is a hallmark of all modern economies.
Altaf Halde, Managing Director - South Asia, Kaspersky Lab: The overall Union Budget 2016-17 is encouraging for the common man, especially the tax relief in HRA. The announcement of Digital literacy scheme to be launched to cover 6 crore additional rural households is a welcome move. This will not only boost the fast adoption of digital technologies across the country but also encourage digital means to reach out to consumers and different markets. Start-ups getting 100% tax exemption for 3 years except MAT is again a good call taken by the government.
Vamsi Krishna, CEO and Co-founder, Vedantu Innovations: The launch of two digital literacy schemes for rural India to cover 6 crore households in the next three years, is a welcome step. As the digital literacy increases, it will potentially help the government in delivering quality education more efficiently in the rural areas. Once the basic foundation of digital literacy is laid, it will create significant scope for an ed-tech startup like ours to work towards providing access to quality education to the students in the remotest part of the country. Startups and private companies can join hands with the government in achieving its vision of making quality education accessible for all students in the farthest corners of our country. Similarly, entrepreneurship training through MOOCs, skills-training of 1 crore youth in next 3 years and provision of Rs. 1700 crore for 1500 multi-skill development centres will help create a virtuous cycle of job creation, grounds up.
Varun Khitan, Co Founder UrbanClap: More than being a pro-startup Budget as was expected, the financial layout for FY 2016-17 has taken into account the need to create entrepreneurs across the digital divide. On the one hand there is focused support to women, on the other, there is also a provision to impart entrepreneurial skills to the youth under the Pradhan Mantri Kaushalya Yojana. The proposal to open up 1500 multi-skill institutions with adequate allocation will be a value add.
Adhil Shetty, CEO & Co-founder, Bankbazaar.com: The budget makes a push for Financial Transparency and Efficiency in delivering subsidies by making the payment process more digital. We strongly believe that statutory backing for Aadhaar will be a game changer. The subsidy scheme and the social security scheme will be automated and Aadhaar-based, thereby increasing the role of the digital in the financial sphere. The govt. is also considering computerized processing to resolve fraud cases. In addition, two digital literacy program covering 6,000 extra villages are also being planned. All this will lead to a more digital community that can access the benefits of the government initiatives better.
Bengt Rittri, Founder and CEO of Blueair: We welcome the initiatives taken by The Finance Minister Mr. Arun Jaitley in this budget to control the air pollution levels in the country. However, home and business owners as well as the air purifier industry need to be incentivised to get air pollution protection devices such as air purifiers in every Indian homes. To start with, reducing import duties on air purifiers can be a step that can be taken by the government.
Parshant Jain, Co-founder Doctor Insta: In the Union Budget, Government has taken positive steps towards improving healthcare sector. With special emphasis being laid on healthcare protection schemes, specific budgets for senior citizens and 3000 affordable stores across the country, the government is clearly focusing on improving rural healthcare needs. we believe that telemedicine is a resolution to this problem and can help shift the healthcare paradigm of our country.
Srikripa Srinivasan, Senior Director (Finance), EMC India CoE: The nine pillars for transforming India announced by Finance Minister Arun Jaitley in the Union Budget for 2016-17 are undoubtedly praiseworthy. The Digital Literacy Mission Scheme and other measures to give a fillip to education, skill development and job creation are in line with the country’s priorities. However, India needs radical transformation in all spheres of life and businesses with initiatives like ‘Make in India’ and ‘Clean India’ surging ahead at a quick pace. I would have liked to see more bold steps to upgrade infrastructure and leveraging the power of ICT with good governance.
Ashok Chandak, Sr. Director, Global Sales & Marketing, NXP Semiconductors. The Union Budget 2016-17 has been focusing on supporting existing government initiatives like ‘Make in India’, ‘Digital India’ and ‘Start-up India’. There are several incremental steps being taken in this direction though no major or path breaking policy initiatives.Government's commitment to encourage investment in manufacturing and infrastructure will propel growth and there are measure to boost the start-up ecosystem and IP development in Country. Furthermore, the government has initiated additional steps on increasing local value addition for the Make in India of few electronic products such as set-top boxes, mobile phones, routers, telecom equipment’s, electric vehicles, solar products , Computer’s, etc. with due importance as they hold the key to the nations’ inclusive development. Though, in short term the prices of these products may go up marginally.
Arvind Vohra, Country CEO & MD, Gionee India: The Make in India initiative by the Government has been in the highlight for a long time. The budget 2016 clearly depicts that the government is in full support of start ups and Make In India initiatives. The Finance Minister has proposed changes in the customs & excise duty rates to boost Make In India, however it is yet to be seen how it would affect the smartphone industry. In my opinion this will surely act as an impetus for the sector and will go on to make the industry more competitive. Government's initiative towards the R&D sector to Accelerate Depreciation Limit to 150% from FY 2018 is also a welcome boost for the manufacturing sector.
Vijay K Thadani, Vice Chairman & Managing Director, NIIT Ltd: We welcome the focus on education, skills, job creation and entrepreneurship in this budget. Emphasis on promoting excellence in higher education on a level playing field by identifying 10 public and 10 private institutions, is a good move. Digital repository for validation of qualification will provide a great boost to high employment industries, such as the IT sector. Also, upgradation of National Career Services will produce more effective connection of jobs with skills.
Atul Jain, COO, Smart Electronics Business LeEco India: LeEco would like to welcome the measures that have been introduced as a part of the Union Budget for 2016-17. The Finance Minister has taken a progressive approach towards policy measures by putting forth a proposal which advances the country forward on the path of progression. The budget also highlights the government’s plans for making India digitally literate, with the announced digital literacy scheme covering 6 crore additional rural households’ showcasing great potential for creating a digitally connected India in the future