Mr. Arun Jaitley, the Finance Minister of India is all set to announce the next Union Budget on 1st February 2018. Entire business establishment from large to small have huge expectations from FM.Whereas common man is looking for relief from individual tax and big announcements to combat high inflation rate. This budget announcement seems to be very crucial as it’s coming in GST era now. ICT industry is one of the biggest industries in India and it has a big contribution towards overall GDP. Every year, we made our wish list when budget is supposed to announce. This year also we have lots of expectations from FM and we expect him to listen to our demands for the well-being of our industry. To put our demand before budget announcement, DT complies the overall sentiments of our key ICT leaders for Union Budget 2018-19.
We All Expect IT
“I believe India is moving in right directions to make necessary changes in the policies, but ease of doing business is still a concern area. We need to have minimum of Paper work or Digital work for making life easier for people to focus on growing the business. Rajshekhar Bhatt, Country Manager, ECS said, I believe having BIS is right policy but still we see lot of discarded or eWaste products from global market is dumped in India suppose need to have strict policy to STOP the same. Would like to see subsidy for products “Make in India” for people to start making in India & finally move to “MADE” instead of make.”
PG Lakshminarayan, Vice President – Finance, eScan stated, “The Union Budget for the year 2018-19 will be unique as many prime factors like GST will play a key role this year. With the Government of India promoting Digital and cashless economy, we expect benefits to be given to investments done in building the IT network infrastructure.FM should consider incentivizing IT infrastructure towards encompassing high-quality technology facility in the digital era today. We hope that the government incorporates policies and measures to also develop the security software industry in India.”
“Kingston, being a channel friendly company, has a strong base of partners that expect the upcoming budget to widen the scope of business and to create assets that help bring more business opportunities. Also, while we back the government’s initiatives for a Digital India, we also look forward for a higher investment in securing the data which is collected centrally. Last but not the least, we would like to see certain revisions in the tax structure on PC components and peripherals. This will help achieve a higher PC penetration rate in the country and get fresh talent in the PC dependent industries like Media, Production, Gaming, etc”, said Vishal Parekh, Marketing Director, HyperX and Kingston Technology – India
“We expect the Government to decide a single Good and Services Tax (GST) rate all across the country in the upcoming budget. There could be two different tax rates, but the Government should avoid multiple tax rates for the betterment of the industries. Secondly, the Government should bring all the leftover items in the ambit of GST. Krishna Choudhary, Director, Rashi Peripherals said, “We have come across the incidents where composite taxes or GST do not allow traders to take full benefits of input credit. This is a serious concern, which needs to be addressed on a priority basis so that the business community can get full advantages of GST. From a business community point of view, these are very crucial issues the Finance Minister should address to make ‘One Nation One Tax’ a reality.”
“This will be Finance Minister Arun Jaitley’s last full budget. People have a lot of expectations from him. They hope that there will be some relief for both ordinary tax payers and business community, keeping in mind the 2019 elections. With GST, the government’s tax base has expanded, so it is reasonable to expect a rejig of tax slabs, lowering of rates and increase in investment cap limit under section 80C to benefit people and encourage them to save more” said Sudhir Singh, Managing Director, Marg ERP
“We expect our government to bring some taxation relief to the small and medium industries. The government is already providing benefits to these industries but the threshold of taxation for the business class should be increased. With the onset of GST, technology has come up as one of the top most priority for the business man as well as the common man. We expect the Budget 2018, to provide some tax benefits to the firms and organizations that are extensively working towards making the GST transition easier for business community and the common man”, he further added.
Altaf Ansari, Regional Business Manager, PhotoFast says, “In the interest of the business community and the country, the Government should encourage large MNCs / Manufacturing giants in the world to set up factories in India and that means it should provide the necessary clearances and ease of setting them up which is still in words which needs to be converted into actions. The government should also look at the feasibility of having one GST slab for all goods and services.”
Mukesh Chaudhary, Country Head-India, SAARC & ME, RAPOO Technologies India Pvt. Ltd. Commented, “One of the top items in my wish list for the Union Budget 2018, is the reduction in bank lending rates for business, so that a lot of funds are diverted to the market for investment which result more rotation of funds. Consequently this will also impact the overall business growth in a positive manner.”
“The upcoming budget should focus on smoothening of GST as it will further benefit ease of doing business in the mid-long term. The government should also look at lowering of GST on mobile phones especially budget handsets from 12% to 5% making them more affordable for the common man.Clarity on Input Taxes is another priority as GST allows a company to claim refunds on the tax already paid in the value chain. But there is still little clarity among traders how the input tax credit system will work, especially for those who are at the end of supply chain. The Basic Custom Duty on SKD imports should be reduced to promote ‘Make in India’, commented Sanjay Kumar Kalirona, CEO & Director, COMIO
Relief for Common Man
“Common man or middle class is biggest buyer & their buying capacity is key for the growth of the country said Rajshekhar Bhatt. Few things which common man looks for is lower income tax, if government want to influence more people paying taxes one way is to offer discount or Zero Interest rate for people who are filing their return for 1st time (not based on age but based on income). India is by an large believes in saving for future if Government can make changes in tax structure to avoid double taxation on saving schemes especially for senior citizens this will automatically increase the buying power.”
PG Lakshminarayan said, “We hope to see a favorable change in the Income Tax benefits for the customers as the spending is still anticipated to decline due to GST. We expect that the budget would provide tax deductions on purchase of IT devices for consumers. This will help the industry to make improved technology more accessible to the common man to support the initiative of Digital India.”
“The common man should also be a focus in this budget and we have already seen some bold reforms recently with demonetization followed by GST, which have directly or indirectly affected the way an average Indian's spend patterns. This budget is expected to restructure the Income Tax structure to bring down the burden on the common man. There should also be a revision to the list of items listed under luxury that have now become daily necessities, which should bring more buying capacity to the Indians at large” added Vishal Parekh.
Krishna Choudhary commented “As mentioned earlier, there should be single or dual tax rates all over the country. I think the Government should be more liberal and there should be a uniform pricing of petroleum products across the States to benefit common citizens.”
Sudhir Singh says, “Whenever the income increases for a household by reduction in tax or reduction in the expenses, it ultimately increases the total household income. For instance, the current threshold of taxation is 3 lacs, and if it goes up to 3.50 lacs and the limits of investments also goes up then this can directly increase a person’s income. This can be utilized for any purchases or the person can aspire to buy something when he/she has disposable income to utilize. If tax benefits can help a person to increase his/her household money then he can spend and purchase and utilize the money more proficiently.”
“In the interest of common man, the government should bring in the sectors/goods that are still not in the ambit of GST such as petroleum & Electricity. By bringing these under GST, it will reduce the tax burden on all the industries and business which will have a domino effect on the prices of the commodities and thus increasing the buying capacity of the common man”, said Altaf Ansari.
“The load of direct & indirect taxes should be reduced for the common man, especially the income tax. An increase in the buying capacity is the need of the hour for the markets to grow”, said Mukesh Chaudhary.
Sanjay Kumar Kalirona said, “Government should think about lowering of the tax burden from common man with tax exemption increased to minimum 5 lakh.There should be policies to include more people in tax bracket and issue privilege cards to those paying taxes. Aadhaar cards to have coding for people who are paying taxes and accordingly provide preferential treatment to tax payers in the form of lower loan rates for car and house loans etc. Another method is to link income for IT returns to discounts on tax slabs so that people are motivated to deposit tax.Lower the tax slabs across India to widen the tax base in order to drive higher collections of taxes.”
Quick Reactions
Sharing his views Alok Dubey, CFO, Acer said, “With the introduction of GST, year 2017 has been an eventful year across economies and industries. For the year 2018, we are optimistic that the union budget will focus more on Digital India initiative in order to shape the IT infrastructure and increase adoption of technology to encourage digitization. We are also expecting that the government may slash corporate tax for the larger companies in the upcoming budget. It may/should help Indian companies to compete globally and attract more investments to the country. Besides this, we are also expecting that the budget will be centered around lowering personal income tax slabs, and tax savings schemes which would lead to higher disposable income and directly benefit the normal taxpayer.”
“Supply of goods and services to units registered under STPI should be GST exempted. Entities registered as STPI units have fueled the economy for almost a decade by bringing in convertible foreign exchange into India and have proved themselves as partners the nation building. Though there are schemes supporting the STPI units, claiming GST/Service tax refunds for the unutilized credit is not an easy task. Amendments in the Law exempting levy of GST on services rendered to STPI would enable release of unwarranted pressure created on the working capital.” Commented Swetang Vin, Corporate Vice President and Regional CFO, AMD
Talking on budget, Aniketh Jain, CEO & Co-Founder of Solutions Infini Pvt. Ltd. Says, "This year budgets are going to be significantly crucial as they happen post the year of notable reforms like Demonetization, GST implementation and insolvency & bankruptcy policy. This year budget also marks significant impact on the way our ecosystem functions. Bringing in policies that foster growth in employment, direct tax reforms, creating more clarity on the way bitcoin operates and its significance on Indian economy can be familiarized for smoother functions. The last year's budget has taken various initiatives to improve the ease of doing business, controlling inflation, digitizing the financial and individual records. Increase in FDI (Foreign Direct Investment) is a pragmatic initiative that has opened up investments from various sectors. Government should capitalize on the growth trajectory of the past year to strengthen the existing framework of the policies and to create sustainable solutions that foster employment opportunities, transparent financial policies to make India USD 6 Trillion economy in a decade of time."
“The upcoming Union Budget 2018 will be a significant one as it will be the first budget after a bold economic measure like GST has been implemented. We are likely to witness a whole lot of business and economy friendly measures being announced, said Vivek Agarwal, Co-founder, M-tech Informatics Ltd. Thanks to the government’s Make in India initiative which encouraged local manufacturing and augmented production, India has emerged as the second largest mobile phone market in 2018. As the country eyes the top position, the mobile phone industry expects the government to maintain and introduce more favorable policies for domestic manufacturers. First, in order to prevent dumping of phones in the Indian market, the government should increase the duty on CBU’s to 20 % (recently govt. has increased duty on CBU’s from 10 %to 15%). This will provide domestic manufacturers a level playing field vis a vis importers and encourage them to expand capacity. Second, we expect the government to lower bank loan interest rate by 2%- 3 %. Mobile phone manufacturing is a capital intensive industry, with long credit cycles. Also,with the introduction of GST, a lot of working capital is tied up, making it tough for manufacturers. Furnishing a bank guarantee rather than blocking working capital would be a big relief. Therefore, to ease the pressure and make manufacturers more competitive, a lower interest rate coupled with bank guarantee would be crucial. Last but not the least, we hope the government extends the IGST benefits to manufacturers.”
“Macroeconomics is at a desired level reigning in fiscal deficit and the trend of softening interest rates is here to stay. From a competitive landscape perspective, as an enterprise TAKE Solutions is very much aligned in the Life Sciences and Pharmaceuticals domain to industry requirements. We need an increase in the core Research & Development investments in the current ‘Make in India’ initiative for more positive impact on organizations.”, concluded Srinivasan H.R., Managing Director and Vice Chairman, TAKE Solutions.
Sharing his views, Suman Reddy, MD, Pegasystems India said, “The industry is still reeling under the APA (Adv Pricing Agreement) leading to confusion around the double taxation component of transfer pricing. We are looking for further clarity on this. Further, the development centres are looking for a more favourable deduction of Section 35 (2AB) to further India’s image as and R&D capital. On the startup fronts, local governments have set the precedent for bolstering innovation and entrepreneurship, and conditions like angel tax for domestic investors being higher than foreign investors must be relooked at. The government can also heed to IT association’s requests to set up a more central initiative around new tech reskilling, as there are initiatives being undertaken by organizations who find it feasible.”
KK Mookhey, Founder & CEO, Network Intelligence - Global Cyber Security firm said,“In last years budget, the Finance Minister announced the setup of CERTFIN. While the initiative was much needed, we hope to see much more specific action points in the 2018 budget that will align with the digital transformation journey that the country is undergoing. The 2018 budget must support development in the cybersecurity infrastructure by focusing on people, process & technology. The expectations are for benefits to local organizations for a much needed push to increase qualified cybersecurity professionals, set up local compliance across all sectors for Data Security & to waive off taxation for homegrown cybersecurity technologies.”
“Government led programs like Digital India, Make in India, Smart Cities etc. are triggers for a boost in the country’s economy. These campaigns have opened a plethora of opportunities for IT industry as well. To truly realise the potential of these game changing initiatives, it is important to harness the power of collaboration and by extension, Open Source. In this budget, we look forward to continued focus on accelerating these initiatives using Open, Agile, Secure and Scalable solutions.” Added Rajesh Rege, Managing Director, Red Hat, India.
Kailash Katkar, MD and CEO, Quick Heal Technologies Limited said, “Government should invest in building better compliance policies for banking and payment apps. Government can collaborate with banks and financial institutions to educate their customers around cybersecurity and security of their devices. In such a scenario, Government should boost the overall spending on cybersecurity. Government has already started taking steps in this direction by mandating all departments to spend 10% of the IT budget on cybersecurity. On the taxation front, the Government should reduce the GST rate on cybersecurity products and services from the existing 18% to 12%. This will encourage individuals and businesses, especially SMEs, to invest in security products and solutions to protect their systems.”
Satya Prabhakar, Founder and CEO, Sulekha commented, Budget 2018 can help MSME’s in these two aspects:
1) Help provide uncollateralized credit:
While lot of fintech organizations promise small-ticket personal loans, the ability to provide loans in the region of Rs. 2 to 10 lakhs using little collateral is beyond the ability of startups. The Govt. can aid in scaling up business loans for service MSME’s.
2) Reducing or removing GST on promotional spends:
Most MSME’s may come under the GST composition scheme that has business turnover limit of Rs. 1.5 crores currently. Budget 2018 can look to see if marketing and promotional spends done by such entities are fully exempt from GST. This will help them to further invest and grow their business.
