Here is What Indian IT Industry Expects from Union Budget 2023-24

Here is What Indian IT Industry Expects from Union Budget 2023-24

The upcoming union budget is expected to foster the growth of Indian IT industry. This is what we all wish before announcement of Union Budget every year. This year also industry looks towards Finance Minister Ms. Nirmala Sitharaman to announce some most required and effective policies that would help the stakeholders to achieve more growth in next FY. Here are the expectations from key IT players, take a look:

"This Year's Budget Should Give Digital Infrastructure And Skills A High Priority"

Alok Dubey, Chief Finance officer, Acer India commented, “Budget 2023-24 would probably be the most challenging one that Finance Minister Nirmala Sitharaman would be tabling on February 1, 2023. I think that this year's budget should give digital infrastructure and skills a high priority. Although India may have a positive view of "digital" and technology, more needs to be done to support the country's digital-first strategy as it aspires to become a USD 5 trillion economy. The government's commitment to digital skill development and its alignment with the IT Tech sector, and the PLI scheme targeted at helping manufacturers of IT hardware and computer servers need to receive equal weight in this year's budget. Government policy could be changed to promote the development of talent and skills. The tech industry requires a talented and skilled workforce. The government may provide funding for programmes to modernise educational buildings with state-of-the-art R&D capabilities.”

“It Would be Welcome if The Union Budget Places A Focus on Bridging The Cybersecurity Skills Gap”

“Cyberattacks are increasing in terms of scale and complexity, making it one of the biggest threats enterprises face today. Amidst this, there is an urgent need to build a talent pool that is equipped to handle new-age sophisticated attacks. It would be welcome if the Union Budget places a focus on bridging the cybersecurity skills gap and increasing awareness around the same. We are hopeful that the government will take cognizance of this, and increase spending on skilling and training initiatives. In the long run, this will help create employment opportunities, as well as build defenses against threat attackers,” stated Sunil Sharma, Managing Director - Sales, Sophos India and SAARC.

“I Hope That IT Industry Gets The Importance That It Deserves In This Year's Union Budget”

Commenting on the key expectations from the budget for consolidated growth of the IT industry, Subodh Gupta, CMD, Microtek International Pvt. Ltd. said, “Considering the global economic uncertainties, India is better placed to attract foreign investment. The role that the IT sector will play to drive economic growth is going to be critical in the financial year 2023-2024. As per a forecast by Gartner, IT spending in the country is projected to grow at 2.6% in 2023 and will reach to the level of $112.42 billion. The growth of IT sector has a multiplier effect on other sectors also. The government has been emphasizing on digital India as the country moves ahead to become USD 5 trillion economy.”

“At Microtek, our Line Interactive UPS & Online UPS product categories cater to IT companies for their backup requirements. So, the demand of these products increases manifolds as the IT sector expands. I just hope that a key economic vertical like the IT industry gets the importance that it deserves in this year's Union Budget. I hope that the government announces next round of measures to strengthen digital infrastructure in small Indian cities and towns. We also need talent that can help to bring innovations in the digital space. So, more universities with focus on enhancing digital skills have to come in tier-2 and tier-3 markets of the country. A large number of start ups have come in various technology segments including FinTech, HealthTech and EdTech among others. I hope that government continues to support such start-ups in this year's Union Budget as well,” concluded Mr. Subodh Gupta.

“Our Expectations for The Upcoming Union Budget for The IT Market is to Boost Consumption and Drive Growth”

The IT distribution sector is growing at a very good pace and expect favourable policies and incentives in budget 2023 to accelerate the growth. Commenting on the expectations from upcoming budget, Prabhakar Iyer, Executive Director and Chief Financial Officer, Ingram Micro India Pvt. Ltd. said, “Our expectations for the upcoming Union budget for the IT market is to boost consumption and drive growth. So the income tax limits may be raised to INR 5 lakhs per annum. It is suggested that section 72 of the Income Tax Act needs to allow an extension of carry forward of loss by another 3 years. Relax TDS u/s. 194Q on Sale and Purchase of Goods - by introducing a minimum threshold limit and covering only transactions which are not covered under GST.”

Prabhakar further added, “For ease of doing business viz. Tourism / Gifting / Travel industry section 194R be relaxed by restricting its applicability only to foreign travel and events outside India. Duplication of E-Waste liability needs to be removed by clarifying that EPR Authorization does not apply to the importer when goods are sold to manufacturers, system Integrators and assemblers who have their independent obligation as manufacturers under E-Waste Rules for the goods produced/manufactured by them.” 

“Simplify procedures for filing Appeals before Commissioner Appeals & CESTAT by allowing to file combined of appeals on the same matters instead of making trade appeal for each BOE separately. Amend the law so that without a seizure, goods cannot be detained for more than a week,” concluded Prabhakar.

“We look forward to seeing a stronger emphasis on cybersecurity in this year’s Budget”

Parvinder Walia, President for Asia Pacific and Japan, ESET said, “India has made significant strides in its digital transformation in recent years. However, as the adoption of technologies such as cloud and digital payments grows, this has also increased our vulnerability to cyberattacks, such as ransomware and data breaches. Strengthening the country’s cybersecurity capabilities will be especially critical as India continues to progress in its digital transformation journey. We look forward to seeing a stronger emphasis on cybersecurity in this year’s Budget - from both an infrastructure and skills perspective.”

“For starters, ensuring that critical infrastructure such as utilities and healthcare institutions have adequate safeguards to deter and mitigate the threat of cyberattacks will be vital. Investing in the development of cybersecurity technologies, for instance, to combat online scams targeting consumers, can also help to boost confidence in adopting digital payments. Promoting the development of cybersecurity skills and talent will also be essential in ensuring India’s digital readiness. This could include subsidised training for specialised cybersecurity talent and the introduction of cyber wellness into the primary and secondary school curriculum to boost awareness of good cyber hygiene. By investing in the cybersecurity ecosystem, businesses and consumers will be better-equipped to leverage the opportunities in a digital economy,” concluded by Parvinder.   

“We Hope That The Budget For 2023 Will Continue to Prioritize The Needs of The Telecom Industry”

The IT distribution industry has great expectations from this year’s union budget. Talking about the expectations from finance minister, Sanjeev Chhabra, MD & CEO, Beetel Teletech stated, "Investment in infrastructu           re is crucial for the growth and advancement of any sector, and we are grateful for the government's efforts in supporting the telecom industry. Last year, the government recognized the importance of reliable and sustainable power sources by allocating an additional 19,500 crores for the solar PLI scheme. However, with the rollout of 5G networks, the trend of solarizing telecom towers is gaining momentum. We hope that the budget for 2023 will continue to prioritize the needs of the telecom industry and provide the necessary support and incentives for developing telecommunications infrastructure in India.”

Sanjeev Chhabra, further added, “At Beetel we are dedicated to doing our part to make a change and work towards a sustainable future. With one of our partners, we have already started the rollout of solarisation of existing towers for a Telecom Service Provider, wherein Solar solutions are being installed at sites. Going forward we would also be offering an end-to-end, comprehensive solution, wherein Solution Design, Installation and Commissioning, solarisation, integrated software-based management, and reporting of the health of the infra and energy analytics along with operations and maintenance would be provided.”

“In This Year's Union Budget, It Would Be Good to See More Investments and Programs in Upskilling”

Puneet Gupta, Vice President & Managing Director, NetApp India/SAARC said, “The technology sector in India has been growing rapidly over the last few years, driven by a number of factors such as increasing digital adoption, the growth of e-commerce, launch of 5G services and the rising demand for cloud services. Ahead of Union Budget 2023, here’s what the technology sector expects: 

“Despite recent global headwinds, we have seen consistent growth in the technology sector. With the rapid technology adoption across sectors, we are well poised to becoming a USD 5 trillion economy soon. With cloud and data technologies becoming the de-facto standard for businesses to operate, Gartner estimates that public cloud spending in India will grow 27% YoY in 2023. Amidst this, there is a need for the government to focus on incentivising the use of cloud services and deep tech like AI, blockchain etc., across industries,” continued Puneet Gupta.

“In 2023 and beyond, upskilling of talent in an environment driven by technology will be mission critical. The government has made great strides towards this, through the Skill India program. In this year's Union Budget, it would be good to see more investments and programs in upskilling, as this is an important factor towards achieving the collective Digital India dream of our nation,” concluded Puneet Gupta.

“We Suggest The Government to Withdraw The Decision to Charge The Custom Duty of 5% on The Open Cell Imports”

Avneet Singh Marwah, Director and CEO, Super Plastronics Pvt Ltd, a Kodak Brand Licensee, said, “We expect the government to come up with an updated tax regime and change the GST rate from 28 percent to 18 per cent at least for TVs up to 40-inches. We suggest the government to withdraw the decision to charge the custom duty of 5% on the open cell imports. Additionally, there is a dire need to include LED TVs in the PLI Scheme. The industry has undertaken huge efforts during the pandemic to support the economy. The entrepreneurs and the industry should feel secure while they plan to make more investments.”

Avneet further added, “The introduction of the 5G technology is a welcome move but there is a need to really expedite the process. The economy is very much dependent on high speed of the internet and its time to take it to the next level as soon as possible. The development of better infrastructure should also be taken into consideration. It is very important to expand the road connectivity to semi-rural and rural areas which will enable the industry to make the last mile deliveries

“I Hope That Budget 2023 Scales A Path Towards India’s Growth Story, Especially in Infrastructure and Technology Sectors”

Rajeev Sharma, Chief Strategy Officer, Mitsubishi Electric India Pvt. Ltd. said, “Mitsubishi Electric India is looking forward to encourage Infrastructural development and bring technological innovation through our products and solutions for the Indian market. I hope that Budget 2023 scales a path towards India’s growth story, especially in the infrastructure and technology sectors. The expectation for the upcoming union budget is to continue and provide the right policy and budgetary framework to ensure economic growth of the country and a budget design that can stand as per the GDP growth rate expectations.”

“Considering that the Indian economy has begun to recover from the fiscal repercussions of the COVID-19 pandemic outbreak, the manufacturing sector is expected to experience solid growth, which can further strengthen by providing fiscal incentives and specific schemes in the upcoming union budget 2023-24,” continued Rajeev Sharma.

“I strongly believe that Indian government will prioritize the policies that can benefit infrastructure, manufacturing sector and promote renewable energy allowing the country to realize its potential on a global scale. Manufacturing investments must be encouraged among technology providers to bring self-reliant solutions in the country. Development of new-age manufacturing skills across the top and bottom of the pyramid must be enlightened which can be a game changer for further skill development. The overall expectation from the union budget is that it brings a steady growth for the present and future of the country,” concluded Rajeev Sharma

“The Upcoming Union Budget Is Expected To Bring Conducive Policy Initiatives To Incentivize The IT Sector”

Arun Kumar Gupta, CFO, Newgen Software Technologies Ltd. said, “Investments and initiatives toward digital transformation have significantly accelerated in the post-pandemic world. With Union Budget 2022-23, the government should bring policies and reforms to support enterprises in their digital journeys and facilitate their growth. Initiatives like long-term work-from-home policies, simplification of the GST regime, and streamlining labour laws can facilitate a less-ambiguous and conducive business environment. Also, there is an urgent need to simplify the foreign withholding tax structure to ensure that full set-off is available to IT companies operating in multiple countries.”

“Special Economic Zones (SEZ) play an instrumental role in driving the Indian IT sector's growth. Improvements in SEZ-related policies and their extension will help strengthen the sector further. The IT sector is indisputably an integral part of India's growth story. However, the government should stay mindful of the recent disruptions in the sector caused by the pandemic and ongoing global business uncertainty. The upcoming Union Budget is expected to bring conducive policy initiatives to incentivize the IT sector and accelerate its growth,” concluded Arun.

“The Budget Should Focus On Increase Spending On R&D To Foster Innovation”

Ramanujam Komanduri, Country Manager, Pure Storage India said, “2022 was a difficult yet extraordinary year in many ways. Digital has taken center stage as the effects of the pandemic continue to recede. India is already one of the fastest growing digital economies, and we will continue to strive towards becoming the global digital capability hub. The budget should focus on three pertinent aspects. Firstly, hasten infrastructure expenditures in digital technologies, since technological investments are thought to have a multiplier effect on the economy. Secondly, increase spending on R&D to foster innovation and tap into the amazing engineering talent that we have in the country. Finally, enhance the focus on sustainability as climate change requires urgent attention and action and requires all of us, as individuals, organizations, and the government to pull together, utilizing environmentally sustainable technology.”

“We Expect Reforms In The Budget That Would Accelerate Growth Channelised by Consumer Demand”

Lalit Arora, Co-founder, VingaJoy said, “Considering that the manufacturing sector is a significant contributor in supporting employment and economic growth, amplifying its growth has long been on the agenda of the Indian government.  Budget 2022-2023 Consumer electronics manufacturers were left disappointed as there was no concession or GST rationalisation given on products. From the Union Budget 2023-2024 we expect reforms in the Budget that would accelerate growth channelised by consumer demand.”

Lalit Arora continued, “Given that hearable devices are a new rage, it is high time that hearables are also incentivized under consumer device categories. As of now, hearables don’t get augmented by any specific government encouragement policy or subsidy. Also encouraging R&D/Designing in India & Promoting new supply methods: The government can acknowledge and encourage manufacturers by providing subsidies to Completely Knocked Down (CKD) and Semi Knock Down (SKD) production. It increases the probability of getting better returns and extends companies’ footprint in mature markets.”  

“We are also expecting additional tax benefits and lower tax rates & extending the scope of employee stock ownership plan (ESOP) taxation reforms to startups. This year the Indian economy is on the road to recovery and the Union Budget 2023-2024 will be crucial for the Consumer Electronics sector as it can facilitate the industry’s effective revival. The manufacturing giants, MSMEs, and SMEs alike are looking forward to the upcoming Budget 2022 which can effectively give a flight to their growth path,” concluded Lalit Arora.

“The Budget Must Consider Investments in State-Of-The-Art Incubation Centers”

Kunal Nagarkatti, Chief Executive Officer, Clover Infotech commented, “With the rise of new-age technologies such as artificial intelligence and the proliferation of internet access all across India, it is an opportune time for India to invest in new-age digital technology. The best companies are leveraging technology to scale and grow. The budget must focus on investing in Tech R&D, product innovation, and technology solutions and services and ensuring 5G services all over the country. The budget must consider investments in state-of-the-art incubation centers which can digitally transform ideas from all over India into sustainable businesses of today and giant corporations of tomorrow. A simultaneous investment in skilling human capital to use these technologies is paramount. The budget must include measures that can help better industry-academia connect to make ‘India’ a hotbed of technology innovation and digital transformation services for the world.” 

“It Would Be Welcome if The Government Relaxed The Mandatory Spend on CSR Activities For Companies”

S. Mukundhan, Group CFO, Fulcrum Digital said, “At a recent event organized by FICCI, Union Minister Nitin Gadkari stated that India is the world's fastest-growing major economy and is set to achieve its $5 trillion GDP goal by 2024–25. The IT sector will play a pivotal role in helping the country achieve this objective; given the rapid digital and emerging technology adoption we are seeing across sectors. Special Economic Zones (SEZs) have played an important part in the country’s rapid economic development over the last two decades. However, there are some changes to SEZ rules that could be looked at to ensure technology businesses can reap these benefits – including smoother processes for the movement of goods between two SEZ units, scrapping of old computers and laptops after paying the residual duties in the open market, and simplifying the permissions process to facilitate remote working.

S. Mukundhan further added, “From a CSR standpoint, it would be welcome if the government relaxed the mandatory spend on CSR activities for companies with 5 crore net profit by increasing the threshold to companies with 50 crore net profit. Additionally, while calculating net profits, the remuneration paid to professional employees should not be added back. This would ease some of the burden on MSMEs. In terms of the personal income tax threshold, it would be beneficial for businesses if the ministry revised the existing limits. In order to do away with the numerous tax exemptions, an alternate method of income tax computation without exemptions could be looked at, but with lower rates and higher basic exemption limits." 

“We Expect Dedicated Incentives For Drone Service Startups”

Vipul Singh, CEO & Cofounder, AEREO said, "over the past year, the Indian drone manufacturing industry has flourished due to various policy reforms and schemes like the INR 120 crore PLI scheme for drones and drone components. This year, we expect dedicated incentives for drone service startups. For B2B drone operations to reach their maximum potential in 2023, restructuring the PLI scheme is the need of the hour. The 2023 union budget must introduce MSME-focussed incentives as they constitute around 90% of companies in this sector. Apart from drone manufacturing, benefits to the drone services sector are necessary for the success of Drone-As-A-Service (DrAAS) under Drone Shakti.”

Vipul further added, “Incentivizing the drone service sector impacts high-skilled employment in the country. We are seeing surging demand for drone services in the country. Thus, we need a technically proficient workforce to fulfil this demand. Additionally, with this year’s budget, we are expecting benefits towards indigenization and native R&D. This is of paramount importance to reduce our dependency on foreign OEMs. An additional 10% PLI benefit for companies with more than 50% indigenous Intellectual Property will encourage the innovative companies to innovate more and OEMs to indigenize further to reduce the dependency on imports. It will help propel Make-in-India and put the Indian drone industry on a self-sustaining trajectory."

“I’m Certain That Government Will Present A Growth-Oriented Budget Towards A $5 Trillion Economy”

Chandrika Behl, Managing Director, Exhibitions India Group stated, “The Indian government has charted a sound roadmap for India’s ascent to its centenary year, which will require moving India’s economy toward sustainability and resilience – rooted in social progress and shared prosperity. While the creation of new technologies is paramount, it is equally important to showcase and demonstrate where and how these innovations fit into a smart and sustainable ecosystem.”

Chandrika continued, “As organisers of the 30th Convergence India expo, which has played an integral role in developing the telecom infrastructure of the country, and the 8th Smart Cities India Expo, India’s largest technology and infrastructure expo, we will continue our legacy of curating platforms that foster growth and accelerate nation building. Our aim remains to contribute to India’s growth story and provide a platform to showcase ‘Brand India’.”

“I look forward to the 2023 Union Budget with optimism. I’m certain that the Government will present a growth-oriented Budget that will accelerate the country’s ascent towards a $5 trillion economy,” concluded Chandrika.

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