Union Budget 2018-19: What ICT Industry Wants from FM?

Union Budget 2018-19: What ICT Industry Wants from FM?

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.

Quick Reactions 

"Looking at the current situation and the government initiatives like digitization in India, it is expected that the budget which is soon to be announced will focus a lot more on creating funds to battle the growing concern of cybersecurity in India. Cybersecurity according to me deserves to be in the top 5 list of concerns in India." Says Shrenik Bhayani, General Manager, Kaspersky Lab (South Asia)

According to Rakesh Dugar, CMD- Mitashi Edutainment, "Post GST, the budget has lost a lot of its importance as a large part of the expectations from the budget were related to Indirect taxes, we think that the government will go for a modest / populist budget to ensure a balanced / positive sentiment before the elections. The budget needs to make it easier for companies to shift their manufacturing into india, right now we see a lot of companies scrambling to shift their base without the infrastructure in place or 100% clarity in the rules. We will need long term clarity in the taxes which can promote trust and allow people to invest into manufacturing, we believe India has the capability to become a major export hub for consumer durables but needs good and stable policies to ensure that we can explore this potential."

"Angel funding is the first source of encouragement for a startup and tax levied on the same is a major deterrent to its growth. Early stage investors should be spared these old policy measures. A popular scheme to take inspiration from is UK’s Enterprise Investment Scheme (EIS). It protects 61.5% of investors’ investment through generous income tax reliefs as well as an exemption of capital gains tax on returns. If a similar tax relief comes to India, it will encourage investments in Indian startups. Angel taxation – is the taxing of investments made by angel investors into startups. The entrepreneurs, in the upcoming Budget 2018, are hoping that government will not impose angel tax as it can be a death knell for the startup ecosystem. The startups are also expecting the government to keep Minimum Alternate Tax (MAT) out of the purview of tax holiday for them," said Ashok Vashist, Founder & CEO, Aaveg.

Anil Valluri, President, NetApp India & SAARC commented, “In the past few years, The Indian Government has initiated a series of initiatives, directed at driving overall change for the positive in the Economy, and results are sure to follow suit. One positive impact for example is the fact that The World Bank now ranks India as one of the top 100 nations in terms of business friendliness, a significant jump of 30 points from the preceding year. I believe more success and impact is yet to come. The upcoming budget will be an important one, as it will be expected to provide the ‘booster’ to this forward direction. This government has demonstrated that it values technology led governance for transparency & efficiency. I believe that investments in a stronger technology backbone is the need of the hour, in order to help bring the Govts vision to a sustainable fruition. A stronger thrust on research and development that enables more indigenous innovation and increased investments in future technologies will be welcome. I do believe that we will see more of citizen focused & friendly decisions, and initiatives to bolster investment into India.”

Dr. Srikanth Sundararajan, Partner, Ventureast, said, “The 2017 budget had quite a few positive implications for the start-up ecosystem – For starters, they allowed start-up companies to pay tax for 3 years out of 7 years only if they were making profits. This has provided start-ups with air cover to ensure growth. GST is a welcome move, because it simplified taxes for start-ups in several service oriented areas, especially logistics, manufacturing, however, GST policies are not very clear, in addition, start-ups were expected to file GST returns on a monthly basis, which impacts cash flow and operations. We believe what will really stand out for this budget is if there is a policy enabling start-ups to file for GST returns on an annual basis instead, which would lead to stabilization of operations. What would be good to if the service tax slabs could be made more uniform for start-ups in the services space giving them all an equal opportunity”

“Realistic Budget is what I expect from this Government when it is going to propose their last budget of their current Term in office. There is more logic than hope to this argument. The Current government has implemented certain bold steps for the economy. If they release a populist budget, it might derail all those steps and reforms.  As a surprise, we may also expect some bolder steps to come in like retail reforms or still more transparency in Real Estate segment” added Limesh Parekh, CEO, Enjay IT Solutions

Rohit Kulkarni, Country Manager, Payoneer, India – “With the roll out of GST last year, many small scale sellers and SMBs were involved in a lot of documentation process and had a lot of questions on the way GST works. The sellers had to classify their products categorically as the tax slab is different for different products. This year, I expect the government will simplify the process towards the online sellers and SMBs, who are expanding their businesses into the global marketplaces, with regards to GST, cross-border trading, conversion fees etc. India has shown a lot of potential in cross-border selling and there are a millions of sellers from India, majorly from the tier 2 and tier 3 cities, who sell apparel, jewelry, handicrafts, etc. globally through various online selling platforms. With cross-border payment providers, coming into the picture, there is now an easy and efficient medium to do the monetary transactions. This gives a better chance for Indian sellers to expand globally in the near future and the process can be eased up to a certain extent with proper support from the government. I hope that the government will take this into consideration while making the budget 2018 and come with reforms which will make cross-border transactions hassle-free and compliant.”

Sanjeev Gulati, Country Manager-India & SAARC, VIVOTEK - We have huge expectations from the upcoming Union Budget 2018, given it would be the last complete budget to be issued by the current Government. In the current tenure of BJP Government, India has soared high on the ease of doing business and we hope that the Finance Minister would continue relaxing the business environment in the country. To the same accord, we expect a relaxation on the import duty. Furthermore, the GST slab must also be reduced, in order to foster business. Lastly, on 14th December 2017, 10 to 15 % of the tax was asked to proposed by the government on the IP surveillance industry, which got implemented from the very next day. It came as a sudden setback in the industry, with vendors refusing to pay the same on payments that were in the process. WIth this budget announcement, we expect the same to be streamlined, in order to create a healthy business environment.”

Budget 2018-19 will be the first budget post one of the most significant economic / taxation reform in India – the legendary GST. This year is definitely going to be crucial for sectors impacted by GSTand we anticipate it being the most optimistic step taken by the government for all industries and overall economic development of India. GST structure should undergo transformation post the budget 2018; the 4 rates should ideally be converted to only 2 rates in order to reduce the level of complexity prevailing in the market at present. A proper analysis is required to be done to sort out this complexity as often there is a clash between ascertaining the category for one single product. Moreover employees should ideally be given an option to choose between health insurance cover and the mandatory ESI. This is primarily because the people, in general, are starting to value medical care way more than ever before and thus, ESI, despite of being better in terms of providing some extra benefits within the same cost, does turn out to be rather basic, not covering every treatment cost or additional expenses. Also, the EPF scheme should much rather be substituted by the NPS scheme once the new budget announcement is made, simply attributing to the convenience and the benefit of the employees. The NPS structure, administrative functionality and compliance in general is much more suited to the investor’s needs and allows for a far greater choice when it comes to allocation of savings” added Ankit Agarwal, MD at Alankit Limited

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