Ahead of the Union Budget 2015, which will be presented on February 28, some of the top industry players have shared what they expect from this year’s annual budget. Below are some quotes from top tech and business heads:
Bhaskar Pramanik, Microsoft India Chairman
Over the past nine months, the Government has set the right context and articulated its vision for India’s economic development. We look forward to this vision being realised over the next year with key announcements in the Budget. Programs such as Digital India, smart cities and Skill India require the creation of technological infrastructure that will need budgetary support. A policy framework for industry and SMEs in particular that encourages innovation and adoption of technology can boost the Make in India initiative. We hope this year’s budget will create an enabling environment for Indian industry to realize its growth potential.
Kenny Ye, MD, UCWeb India
“We expect PM Modi government’s first complete Union Budget to outline the policy and regulatory framework to aid business sentiments and bolster growth.
We have high expectations in terms of attention and budget allocation for the IT sector. We hope the new government is able to provide adequate thrust to investments in IT and its infrastructure. Digital literacy and mobile Internet penetration are other areas onto which we would like to see the Finance Minister’s focus. The budget should allocate substantial funds to develop a robust network infrastructure and realise the government’s “Digital India” mission that will positively impact the nation.”
Eric Branganza, President, Haier Appliances India
"Industry has hopes from the new government as some positive signs have been shown by them towards expediting growth. We expect speedy rollout of GST (Goods & Services Tax) as it will decrease compliance burden for businesses as it creates a seamless pan-India market and also bring down the total incidence of taxes by eliminating cascading effect of taxes on goods and services. We urge that GST should be implemented soon for the benefit of the tax payer. We propose zero per cent custom duty on essential elements for production of White goods like Micro wave Ovens, LEDs and LCDs, Refrigerators and Air Conditioners to enable more companies to set up manufacturing units in India as desired by Government in their "Make In India" campaign which would also result in employment generation in the country. We strongly recommend that the current Excise Duty of 10 per cent on our sector products needs to be retained at 10 per cent as this will give boost to the industry."
Mayur Gandhi, Chief Financial Officer, Schenker India Pvt. Ltd
- Clarity on the GST implementation road map to prepare for an efficient logistics solution for the manufacturers and traders.
- An appropriate tax system for rental costs which is currently subject to Service Tax and TDS at higher rates. Rent should be treated as return on investment and not as provision of services.
- Speedier implementation of investment planned in the Dedicated Railway Freight Corridors for more effective and pollution free transportation system.
- Tax incentives for investment in fuel-efficient transportation equipment and setting up of new warehouses by higher tax-deductible rate of depreciation.
- Drive the “Make in India” campaign by improving India’s rank in the World Bank's 'Ease of Doing Business' index (currently at 142 out of 189) and in the Transparency International’s ‘Corruption Perception’ Index (currently at 85 out of 175) by setting benchmark targets for the same.
Rodney Noonoo, CFO, Xerox India
“The Government of India has adopted a visionary approach to transform the country into a connected knowledge economy with focus on ’Digital India’. The measures & reforms taken in this budget will be crucial for successful implementation of the programme and everyone will be watching this eagerly. The last budget did send out signals of progressive reformation of the economy but a lot will depend on the concrete steps the government will take to propel the economy.
- The need to propagate a conducive tax environment and a clarity of taxation laws. A substantial push is needed to boost existing businesses and at the same time, encourage new investments. This push will not only bring back investor confidence but also be the foundation on which India’s digital economy will be built.
- The other key aspect that requires action is a consensus on the contours of the Goods and Services Tax (GST). A study by the National Council of Applied Economic Research estimated that roll out of the tax would boost the GDP growth by anywhere between 0.9-1.7 per cent. With cascading taxes gone, over a period of time the lower tax burden would translate into lower prices for goods, which is of course, dependent on what the GST rate would be. Hence, a clear roadmap for implementation of GST would enable investors to take calculated calls on their investment/expansion plans in India.
The government is also taking up the ‘Make in India’ initiative in a big way. While this is a great initiative, the budget needs to address the issues of skill-gap, improve ease of doing business, expedite reforms and accelerate digital deployment at a national level – reaching cities and villages.”
LC Singh, Vice Chairman & CEO, Nihilent
“IT product development has been a key focus area in our PM’s Make in India initiative. We look forward to the coming budget to promote the culture of product development & innovation. The entire R&D budget for IT companies must be exempted from tax. In order to promote the culture of product development & innovation, the entire R&D budget for IT companies must be exempted from tax. The transfer pricing must be made simpler and practical. As of now, it is extremely cumbersome. Clarity on transfer pricing related issues will greatly improve ease of doing business. While rollback provisions for APAs in the July 2014 Budget were welcomed, we are hopeful of legislative amendments to prescribe the extent and manner of the applicability of these provisions.”
Aloke Ghosh, CFO & CS, Blue Star Infotech
“Since the government has actively advocated technology penetration and digital literacy, we hope the next move will be to foster technology adoption by sprucing up infrastructure and ensuring last mile connectivity. Government should look to introduce special monetary incentives for the Indian IT companies that invest heavily on research & development to create world-class products. Technology innovation, apart from contributing to foreign exchange is also integral to the government’s ‘Make in India’ and ‘Digital India’ initiative. Also, the Manufacturing and Infrastructure will continue to remain government’s top priority as stated by Mr. Modi on numerous occasions. The sub-industries that fall in these two categories such as MSME, steel, automobile, power, construction, railways and ports could receive some fillip from the government in this year’s budget.”
Safir Adeni, President, TiE (The Indus Entrepreneurs) Hyderabad
“We would expect government to focus on minimizing indirect taxes and not imposing retrospective taxes. The industry would also certainly like to see a pro-investor tax policy and avoidance of double taxation for foreign investors to enhance investments in the country.
In order to boost the Start-up ecosystem, we have 4 suggestions for the government. Firstly, it should adopt tax policy framework of countries like Singapore and New Zealand for faster growth of Start-ups. It should also avoid ‘Angel Tax’ which negatively impacts the fund raising activities of Start-ups as they have to dilute more stake to cover the tax amount. Thirdly, there should be a structured disbursement of the incubation fund as a streamlined process. Lastly, Government should review Companies Act to make it simpler and less expensive for Start-ups to maintain compliances.”
Suman Reddy, Managing Director, Pegasystems India
“The new government has shown some promise so far in highlighting few crucial elements for improving the current economic scenario, enhancing the investor sentiment thereby leading to country’s overall development. As its going to be the first full-fledged budget by the new government, the industry is certainly keen to see some tangible initiatives from the Finance Minister. I believe this budget will set the tone from economic growth path perspective and needs to have strong policy decisions to control inflation and reduce the fiscal deficit. Reduction of oil prices has happened at a good time, which will help reduce the deficit. The government should look at giving further boost to entrepreneurship and provide additional support to scale the startups. ITIR was a welcome move, the industry would look forward to more such initiatives. While Make in India is a great initiative announced by the government, the details are yet to be seen and I hope this budget will layout some realistic measures.
Telangana state needs a fresh start for certain sectors such as manufacturing and real estate. Any support from the center for these industries with further action from the state government will surely help enhance growth in the state as well.
From the IT/ ITES industry perspective clarity on transfer pricing aspects is much awaited in this budget. Additionally the budget should have more support initiatives and mechanisms to boost the startup ecosystem. Initiatives to nurture more engineering talent and boost the skilled manpower in the country with adequate infrastructure assistance should always be in the mix.”
Ramesh Loganathan, Vice President and Managing Director, Progress Software
“I hope something more substantial is set aside towards ITIR and also the Pharma city. We (Hyderabad) are positioned very well for the Make-in-India initiative given we have a strong defense/aerospace presence and also pharma/life sciences. I believe some incentives to boost these segments and local manufacturing would help the city and state.
From the IT Industry perspective the long elusive transfer pricing clarity is one serious expectation from this budget. The various skill development initiatives getting to a mainstream operational mode is another expectation. For the Startup ecosystem, clarity in operationalising the 10K Cr startup fund will be great. The implementation will boost growth thereby enabling startups. More specific policy support that incentivize and support incubators will be a major boost to early stage ecosystem. Moreover, Programs/initiatives to seed the startup thought and initial idea prototypes in colleges; is necessary. A substantial mindset altering initiative will be very helpful in getting more graduates to think about starting up and making in India.”
Debasis Chatterji, CEO, Netxcell Limited
“The Economy should start growing again at 8 per cent and the interest rates should be reduced to achieve this growth. This budget should take measures to reduce complex and heavy taxation in terms of both personal and corporate income tax. The economy will benefit with more incentives for the service industry especially tourism. There will be multifold impact of manufacturing in India. Firstly, we will save valuable foreign exchange. Secondly, we will be independent of the erratic supply schedule from the foreign countries. Thirdly and most importantly, our security concerns will be addressed as the entire process will be run in-house. Hence we will have better control on the quality and security aspects. Hence the ‘Make in India’ initiative is a welcome move. Moreover further incentives for startups and small scale businesses will help in enhancing employment in the country.
The telecom industry needs to be revived with a Realistic 3G spectrum auction. Finalization of a concrete telecom policy will provide clarity and enable ease of doing business for the industry. Tax benefits and incentives for VAS companies to energize the VAS ecosystem are much needed. The government should now look at boosting the telecom sector with the ‘Make in India’ initiative. Selection of key areas and forming exclusive technology parks for the telecom industry will be a welcome and most necessary initiative. Telecom needs the ecosystem to develop to be able to make in India, hence if government provides incentives to ancillary industries it will boost the sector. Moreover there should be adequate tax rebates to make it more viable for companies to do business in India.”
