Union Budget 2023-24: Expectations from IT Industry

Union Budget 2023-24: Expectations from IT Industry

The upcoming union budget is expected to foster the growth of Indian IT industry with strong focus on taking digital transformation to next level. Also, the businesses are looking towards the government for announcements regarding reducing the taxes and bringing positive policies. Here are the expectations of key IT leaders. Take a look:

“We Expect Government To Reduce Duty On Raw Materials, Electronic Parts And Components Of Sub-Assemblies”

Muneer Ahmad, Vice President, Sales and Marketing, ViewSonic India said, "The audio-visual industry is embarking a steady growth in recent years due to technological advancements, industry trends and consumer preferences. Projectors, monitors, interactive displays, and LED video walls are gaining significant momentum and are becoming an integral part of corporates and industries. In this upcoming budget, we expect the Government to reduce the duty on raw materials, electronic parts and components of sub-assemblies. Additionally, the Government should also consider relaxation on the GST rates. For instance, the projection category falls under 28% and IFPs under 18%.

“In recent years the EdTech industry is witnessing an unprecedented shift due to the evolution of newer trends and technologies and improved accessibility of education. Moreover, the Central Government has been promoting and focusing on growing the education sector and giving education for all a high priority. As a result, this industry has received a sizable allocation, and we are grateful for this approach. In the upcoming budget, we further hope that the Government will encourage the use of cutting-edge technology and boost education accessible for all. We anticipate seeing a more successful strategy in the future," concluded Muneer Ahmad.

“Government Should Focus On Improving The Condition Of The Flash Memory Industry”

"We believe that manufacturing companies should be rewarded for developing new technologies and implementing environmentally friendly business practices in the budget for 2023. The budget for this year could have a positive impact on infrastructure; with tax reforms and ease of doing business at the forefront. We anticipate that the upcoming budget will include measures to improve the entire system. Government should focus on improving the condition of the flash memory industry because everyone can see how rapidly the flash memory market has expanded over the past three to four years. The only field in which young India is also contributing is the obviously expanding flash memory market,” said Gaurav Mathur, Director, Lexar Co. Limited.

“We Hope That Government Will Introduce Better Incentives, Aimed At Promoting The Green Economy”

“The union government is continuously working and finding solutions to achieve its 2070 sustainability target. Keeping the same in view, we hope that in the upcoming budget, the government will introduce better and more attractive incentives, aimed at promoting the green economy. Besides this, we expect that government interventions and policy changes like tax rebates for meeting set environmental standards, certifications, green taxes on harmful environmental activities, and subsidies on the use of green products can go a long way in furthering the agenda of sustainability,” stated Kuldeep Malhotra, Dy. Managing Director, Konica Minolta Business Solutions India Pvt Ltd.

“A Budgetary Focus On Pushing Research And Innovation In The Tech Space Would Be Viewed Positively”

“The public cloud spending in India is estimated to touch $7.5 billion, scripting a 29% growth from 2021, as per a Gartner report. However, latest projections indicate a modest growth of 2.6% in IT spending by Indian businesses and forecasts weakening demand for public cloud services, which could lead to a staggering 35% decline in growth in 2023. Thus, the following are some recommendations for the Hon’ble Finance Minister for the Budget 2023. The sector would require dedicated allocation of funds and new measures to promote, support, and incentivize Indian technology start-ups and their made-in-India technologies. The support to native technologies will solve many problems, drive employment, and cater to data security issues. Technology has been one of the biggest FDI magnets. A budgetary focus on pushing research and innovation in the tech space would be viewed positively by Global investors, apart from infusing energy in the Indian R&D space,” stated Ripunjay Bararia, Co-Founder & CTO, Sugarbox.

Mr. Bararia further adds, “India’s challenge of the existing digital divide stems from two factors. The first factor being high cost and unavailability of IT and electronic devices and equipment from both B2B and B2C perspective. Reducing tax or lowering cost of IT technology goods will help the businesses innovate and develop cost effective solutions. It will also make IT devices more accessible and affordable, empowering relevant stakeholders to enhance digital connectivity.  The second factor is ensuring equitable access to network connectivity. A fiscal policy to drive decentralization of Cloud network, promoting edge and hyperlocal cloud technologies, and exploring innovative content and services delivery systems, will help to enhance remote access to digital services, bridge the digital divide, boost local economy, and support socioeconomic development.”

“Unless We Substantially Increase Allocation to Education in The Upcoming Budget We Will See This Negative Trend Continue”

Vineet Nayar, Founder, and Chairman, Sampark Foundation commented, “The cascading effects of covid can be seen in significant drop in learning levels but an increase in enrolment in government schools. Unless we substantially increase allocation to education in the upcoming budget we will see this negative trend continue. Education builds the future of our country and we need 30% increase in number of teachers and their capabilities to teach in the right way. If we miss this opportunity, we would have millions of children who will miss benefiting from the focus on foundational numeracy and literacy skills and next year will be too late.” 

“The challenge of balancing the budget is huge and I hope government sets the right priorities for the future of the children of this country. Today not only the allocation to education is much lower than what it needs to be, a substantial part of that budget goes into teachers doing non-teaching activities. Thus, what actually reaches the classroom is much lower than what is allocated in the budget. I hope we will not just have a substantial increase in education budget this year to fulfil the FLN mission but also draw a red line on using teaching time for non-academic activities, investing in frugal ideas instead of expensive technology solutions that are easy to buy but difficult to use and investment in increasing number of teachers at the cost of everything else because technology is not a replacement of teachers,” concluded Vineet Nayar.

“Government Must Empower the Enhancement and Innovation Capabilities of the Nation with Increased Allocation to Research and Development Ecosystem”

“From increased adoption of digital services and surging demand in new-age technologies like AI, analytics, to the launch of 5G services, the Indian tech sector has been readily serving the tech evolution. With the budget just around the corner, the government must empower the enhancement and innovation capabilities of the nation with increased allocation to research and development ecosystem. Additionally, digital public infrastructure investments need to be amplified for the success of smart cities in India. With the current impetus on expanding the railway and roadways, more concentration must be relied on next-gen surveillance to not only monitor the traffic violations but to also ensure public safety and gather real-time actionable insights during exigencies. With the nation coming back to the “new normal” post COVID, safety of child and women, and surveillance must be a high priority. The growing need for security and surveillance is a driving force for the connected digital world and hence clearer representation of Make in India policy and framework can substantially aid our growth and development. India’s digital economy is still evolving and to achieve its true potential, customs duty and tax relaxations will be a welcome move amid the global economic downturn,” commented Sudhindra Holla, Director, India and SAARC, Axis Communications.

“Budget 2024 May Ease Investors’ Dilemma By Simplifying Taxes On Different Asset Classes Over Short And Long-Term Gains”

“Over the years, the Union Budget has undergone significant changes. This poses a question whether its relevance is reduced; for instance, indirect taxes, one of the major components of the Budget are now winged under the GST council. The railway budget is also merged. However, as a policy statement, the budget is certainly relevant. This is especially true for 2023, as this is the last full budget before the General elections in 2024,” added Bharat Phatak, Director, Scripbox.

Bharat further added, “With a few days left for the Union Budget, taxation is likely to be a major consideration this year with expectations for the rationalisation of capital gains tax and revision in the tax slab for salaried individuals. Capital gains tax ranges from 10% to 20% depending on the asset class and whether or not it's publicly listed. Budget 2024 may ease investors’ dilemma by simplifying taxes on different asset classes over short and long-term gains. Also, a revision in tax slabs is expected, especially for the Rs. 10 lakh+ income group; the tax rate may reduce from 30% to 25%. Lastly, investors also await an extension in the limit to claim tax deductions and exemptions for tax-saving tools including NPS, PPF, and ELSS from this Union Budget.”

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