The new financial year is about to get started and budget expectations of industrialists from the government has risen up,as compared to last year.Reasons could be for implementation of goods and services(GST) tax, supporting business for economic growth, manufacturing in India and other promises made by the government for supporting the economy and business expansions.
Moreover, in the telecom industry, the need for better connectivity as in introduction of 4G services in different circles can be seen as one of the major concerns in the coming fiscal. “Make in India”, “Digital India” and “Smart city” initiatives by government has also increased the demand for IT infrastructure.
So, it is expected that the government will bring in better budget reforms for the IT industry, enabling quality output, advancement in technology, etc. without any disruptiveness. It is expected that the government addresses the needs of IT/ITES which fosters business and economic growth.
Vivekanand Venugopal, General Manager and VP – Hitachi Data Systems India
“We are optimistic that the budget will create more opportunities for innovation in the IT sector, with large global MNCs, smaller enterprises and startups deepening their traction on government-focused projects. The proliferation of mobile devices, wearable gadgets and the entry of 4G into India will generate huge volumes of data, which have to be addressed seamlessly and efficiently by the IT infrastructure backbone.
There will also be a greater demand for technologies that drive social innovation in areas of healthcare, public safety, education, transportation, Energy, financial inclusion, and rural empowerment.Government’s ‘Digital India’, Make in India & ‘100 Smart Cities’ Projects will be the biggest enabler for Cloud, Analytics and Internet of things that Matter. We hope that the budget will lay the groundwork for some important reforms which repositions India as an innovation-led, information economy.”
Gopal Pansari – Director, Savera Marketing Agency Pvt Ltd
“We have very positive expectations from 2016-17 budget. We expect that Government will balance out the Businesses of the fast growing e-commerce Industry and physical retail industry by giving tax incentives. Since Government is announcing more and more economic programs like Stand up – Start Up India and Digital India, expectations from the Union Budget 2016-17 has gone up higher than 2015-16. The government must pass out GST to boost economic growth, this will benefit manufacturing and export segments.
Prospectively, government will be benefited by promoting R&D benefits for the organizations to innovate and come up with newer technologies. This demonstrates concrete actions to revive investment, increase growth and generate employment which will impact the industry. Further, inspired by the Digital India concept of the Government and by keeping eyes on the Technology Driven Nation, we have also changed our name from Savera Marketing Agency to Savera Digital India.”
Bhaskar Pramanik, Chairman – Microsoft India
“We have much to celebrate in what the country has achieved in the last one year. The Government of India has ably implemented the contours of the country’s growth framework through its all-encompassing vision to boost digital inclusion, local manufacturing, and entrepreneurial spirit. As we step into the new fiscal year, I am looking forward to the Government presenting a growth oriented budget that addresses gaps and sets a clear way forward to ensure that the optimism is not short-lived.”
Tarun Wig, Co-founder – Innefu Labs
“The present scenario is quite threatening as we can see with the recently websites of Kerala as well as the Orissa Government coming under cyber-attack. The government should allocate a specific amount in budget for ensuring that these types of cyber-attacks can be prevented.”
Govind Bansal, co-founder -Aqua Mobiles
“The Government is promoting local manufacturing and we hope that it will be continued. We also expect the introduction of the GST as early as possible. Furthermore, mobile industry is a good contributor to GDP, so it should be rewarded with some much needed incentives like relaxation in the corporate taxes for the benefit of the industry as well as consumers.”
Ashraf-el-Arman, MD – Xerox India
“2015 was a very positive year for the Indian economy and it signalled towards sustainable growth. Adding to this, investments grew in the country with a nod to FDI. The steady growth of IT sector has been associated with favourable policy initiatives; the Indian Information Technology sector is expected to grow 11 per cent per annum and triple its current annual revenue to reach US$ 350 billion by FY 2025. What is little worrisome are speculations about the global footprint of this sector potentially shrinking in short term along with emerging competition from other developing countries in attracting investments into the sector.
On the Tax side, considering the existing scenario on tax evasion and other tax related concerns, hopes from budget 2016-17 will soar high with respect to bringing a healthy and robust tax regime in India. Setting up of a strong and flawless tax regime should be a major goal for government in this year’s Budget. The government must bring in measures to revive industrial growth and facilitate a smooth transition to the new indirect tax regime. Implementation of GST as per the deadline will mostly result into a lower service tax rate and ease the way we do business and create grounds for innovation.
Last year’s budget showered lot of promises around Digital India initiative to transform India into a digitally empowered society, it will be interesting to see the progress we have made so far in this budget.”
Sonica Malhotra Kandhari, Director – MBD Group
“The Retail sector has experienced an impressive growth recently due to increase in household income, urbanization and attitudinal shift in customer preferences. However, a lot still needs to be done. The Budget 2016-17 must introduce tax sops to further boost this segment. Moreover, I hope this year’s budget gives a green signal to GST, which will help in managing the multiple indirect taxes, hence benefiting the end customer.
Paucity of several mega and big ticket players across all geographical markets is paramount. The budget must also allow FDI in multi brand retail so that the sector gets on par with international standards. Time has also come to give sops to the retail industry to usher in vibrancy around retail like in the case of Dubai and Singapore, where shopping festivals have become a big source for attracting tourists from around the world.”
Rishi Rana, General Manager for India and APAC – SumTotal Systems
“The government’s ambitious Make in India plan is aimed at reviving the ailing manufacturing sector and making India a manufacturing haven. In light of this, India has caught the world attention and many multi-national corporations are either collaborating or individually setting up business units in the country. This spells good news for the country’s economic, political and intellectual development. However, this also lays emphasis on Learning and Development along with Leadership
With ‘Make in India’ giving a digital push, automation and measures comes into play. The government therefore needs to ensure that the people are prepared to take on this digital revolution. The country’s economic success lies in the hands of its people.
Empowering the people with the right skillset will indirectly empower the country. We therefore expect the Government to give tax exemptions to investments made in L&D development. Simulators, multimedia and e-learning should be made cost effective and easily available for training providers.”
Vinay Pradhan, Country Manager- Skillsoft
“This Union budget, expectations are running high for more growth driven policies which should act as a catalyst for key programs such as the recently launched Skill India program which aims to skill 40.02 crore people by 2022. However, to sustain and achieve success, such programs will require the creation of technological infrastructure that will need budgetary support.
We therefore expect the focus of this year’s budget to be on digital literacy, improved connectivity and access to technology. We expect that the Government to encourage increased participation by the private sector in this skill development initiative. A public-private nexus needs to be created to ensure success of the government’s ambitious initiatives.
With initiatives such as Make in India, the demand for new skills would increase. In addition to fostering fresh talent, government should encourage working professionals to undertake self-education programs to upgrade their skillset. One way to do this is by giving tax benefits to working professionals on expenses incurred by them on self-education.
Overall we are hoping for a more pragmatic and realistic budget session which will foster and support growth of the economy.”
V.P. Mahendru, Chairman – Eon Electric
“There is need to promote LED lighting industry as it will go a long way to save power for the nation and reduce pollution as already committed by us at the concerned UN forums. From the industry point of view, there is a need to provide Income Tax benefits to LED manufacturing companies, Accelerated depreciation benefit to LED plants and push towards faster implementation of GST.
The government should set up an interest refund rebate for manufacturers who have shifted to LED production. Further, Excise Duty exemption should be extended for LED lighting manufacturing companies present in special industrial promotion zones, like Haridwar because of the intensity with which the demand for LED Light is increasing.
Also, the budget should be able to create an enabling environment which can address the issue of skill gap, improve ease of doing business and accelerate digital deployment even for smaller towns and villages for better reach. Government spending for smart cities should be optimized to ensure faster adoption of smarter techniques for early development of new products required for the Smart Cities. Further, an LED substitution fund should be created for state governments and public sector to shift all conventional lights to LED lights within two years.”
Sanjai Gangadharan, Regional Director – SAARC, A10 Networks
“In 2015, the industry welcomed the reduction in tax rate on royalty and fees for technical services from 25% to 10% facilitating technology adoption at low costs. This year we expect the Government to touch up on critical issues like Cloud Protection laws and Cyber Security. India is one of the leading source as well as the destination for cyber-attacks and hence it’s imperative that the Government sets aside budgets to drive synergies between the academia and industry to collectively fight security issues. The explosion of mobile devices and apps, plus the move to SDN, NFV and cloud is driving the need for a new breed of converged network security capabilities that provides high level of visibility and control, without compromising on performance and scalability.”
Rajesh Goradia, Co-founder – Vitruvien
“The introduction of the Startup India mission has provided an impetus to the startup ecosystem in India. It is expected that the government would exempt startups from direct and indirect taxes including MAT. The Finance Minister’s announcement on the introduction of entrepreneur-friendly tax regime for startups is very encouraging.
This policy will help the budding entrepreneurs to establish a strong foothold during their initial days and help create an encouraging ecosystem for them in the country. With a possible implementation of the Goods and Services Tax (GST) Act, it is expected that the tax procedures would be simplified, thereby cutting business costs and helping generate more revenues.”
Vaibhav Singhal, MD & CEO – Savemax
“The retail sector in the country has made significant progress in the last few years on the back of a sharp rise in disposable income and buying power of the Indian Middle class. The entry of established wholesale retail chains has revolutionized the wholesale shopping experience and given retail customers the opportunity to buy a cross section of products at wholesale rates. However, a lot needs to be done to further develop the sector and give customers a truly world class experience.
We expect the Union Budget 2016 to unveil measures that will push overall economic growth, increase income levels, and boost consumer sentiment. We are also banking on the Budget for more spade work on the GST as that will put an end to multiplicity of taxes and streamline the overall tax regime of the country. Allied sectors like Transport, Warehousing, logistics etc must be looked into and given adequate support since they have a vital role in retail sector’s growth.
We also expect the government to take positive steps in creating a level playing field for all retailers operating in India. These policies will have a positive impact on online players (operating on market place model or logistic providers), modern retailers (Wholesale and B2C, both models) and even the neighborhood stores. Further, in line with the “Make in India” initiative, homegrown companies must be incentivized and supported through tax sops and policy interventions for a level playing field and healthy competition.”
Sunil Jose, Managing Director – Teradata India
“India has developed a world-class IT industry that has contributed significantly to its economic growth, technology exports and employment generation. The Modi government is doing a great job in projecting India as a capital investment hub and business-friendly destination and the focus on bringing back investor confidence has worked well for the IT/BPO industry since the last budget announcement.
We expect this to have a cascading effect in terms of continued business growth when the new budget is announced. New initiatives announced in the budget to further complement previous initiatives are eagerly awaited. Continued measures and policies to support and enhance India’s competitiveness for Make in India will be a huge enabler for the manufacturing sector.
Greater support for Digital India initiatives and enhancing access to internet connectivity in rural India should be a priority to boost economic growth and income-generating activities which in turn will boost domestic spending. The government should also consider reducing excise duty on hardware so that better technology becomes more accessible to a wider market. This would be a huge enabler to the IT industry including us and help provide superior technology to a wider audience at more competitive rates.”
Diwakar Nigam – MD, Newgen Software
“Our exports are becoming more and more difficult, due to budget cuts, visa restrictions etc., all around the world. In order to make Software companies stronger, there is need for extending SEZ schemes and removing MAT. This will not only help Indian software companies but also incentivize foreign companies to set up software development facilities in Indian SEZ and provide further employment.”
K.Balakrishnan, MD & CEO – Servion Global Solutions
“In this past year, the government has driven several new initiatives such as Start-up India and Make-In-India. The IT and Electronics industry can play a key role in the success of these initiatives and the government should continue to focus on them by providing the necessary incentives, legal/tax framework and infrastructure support.
This can provide a boost to the investment towards innovations, thereby creating a vibrant start-up community and new manufacturing investments. The government should also increase investments in improving broadband connectivity as this could have multiplier effect on the overall economy. With further emphasis on Digital India and e-governance, we also look forward to a more digitally rich interaction between the government and consumers, with improved IT infrastructure and increased technology adoption in the country.”
Manjunatha KG, Chairman and CEO – Kenscio Digital
“Circumnavigating the Government initiatives of ‘Make in India’ and “Startup India”, this budget has to be in sync with these ambitious movements by providing appropriate fiscal incentives to business and enterprises.
To realize the “Digital India” aspiration, the Government needs to empower both the industries that are into creation and adoption of cutting edge digital technologies for competitive advantage. For this, the budget has to ensure smoothing of taxation barriers for new product/technology development and provide enough incentives to inspire innovation in the field of Digital technology.”
Chandan Chowdhury, Managing Director-India – DassaultSystemes
“India is on its way to evolving as a super power by 2020 and last year’s budget set us in the right direction. It focused on the key indices of comprehensive growth including boosting digital literacy, improved connectivity and access to technology across sectors. The dynamic ‘Make in India’ campaign has been a great success and we are looking forward to its positive returns in the years to come.
We believe that programs such as Digital India, Start-Up India and Smart Cities need a strong technological infrastructure that must be supplemented with budgetary support from the government.
We look forward this year, to a budget focused more on ‘smart cities’. Over the last two years Prime Minister and his government has taken steps to ensure the selection of right cities and bringing together experts and technology to implement the project. Building these Smart cities will require considerable system integration, simplification and standardization of geo data which will be key enablers of building projects across India. The Government must set aside a share of PPP for fund mobilization of smart city projects.
Given that India is being looked upon as an advanced technology hub by foreign multinationals, a lower corporate tax will make India’s IT market more lucrative. Local manufacturing is the back bone for Make in India, it is important that our Foreign Trade Policy recognizes the need to ensure world class manufacturing facilities adoption by domestic players. The policy must offer subsidies on investments and incentives to small scale manufacturers and encourage easier imports of capital goods, industrial raw materials, tools and components with a view to upgrading the quality and competitiveness of our domestic manufacturing.
Finally, in order to accelerate the GDP growth of our nation, the budget also needs to focus on ‘high technology skill development’ and create industry ready talent.”
Koichiro Koide, MD – NEC India
“The IT sector has seen a tremendous growth in the last fiscal globally. Indian Prime Minister announcing the Smart cities mission, Digital India mission to promote various sectors has been really encouraging. The Government’s step towards developing smart cities is an indication that inclusive growth is the top priority. Most recently, the Indian government has been promoting its urban transformation, putting great emphasis on creating smart cities and security.
Leveraging on the power of ICT and with good governance, I believe that India will be able to achieve its goal of achieving its Smart Cities mission in the long term. We appreciate that the Indian government has taken significant steps in the last one year to promote Smart Cities and the country’s 100 Smart Cities Mission which would be an encouraging boost to companies such as NEC. The union budget 2016 must focus and encourage investment in the IT sector to make the Government’s plan of building smart and cities safer.”
Aarti Gill, Founder -FitCircle
“Women entrepreneurship is recognized as an important source of economic growth. I feel, government should encourage diversity, by giving certain tax benefits to encourage inclusion of women in startup workforce
Circumnavigating the Government initiatives of ‘Make in India’ and “Startup India”, this budget has to be in sync with these ambitious movements by providing appropriate fiscal incentives to business and enterprises. To realize the “Digital India” aspiration, the Government needs to empower both the industries that are into creation and adoption of cutting edge digital technologies for competitive advantage. For this, the budget has to ensure smoothing of taxation barriers for new product/technology development and provide enough incentives to inspire innovation in the field of Digital technology.”
Dinesh Aggarwal, Joint Managing Director – Anchor Electricals Pvt. Ltd.
“During the current financial year, while the overall construction industry remained subdued, some initial signs of demand pick are now seen in the commercial (office) spaces in some of the Metro and suburban or semi-metro cities. Construction of Industrial units has gained momentum and some of these being fast track projects indicate positive expectations about the sustained growth of our economy.
Many of the States have picked up the impetus to shape up the “Make in India” vision of our Prime Minister and this confidence building will attract more FDI in the manufacturing sector, aimed essentially at domestic consumption. The forthcoming Budget and Policies have to play their role now to sustain and build up this confidence.
Thus, I expect the Budget to facilitate the ease of establishing business, ease of creating intellectual property, ease of running the business, ease of borrowing money within and outside India to ensure business growth. I also expect the budget to extend an assurance to the Manufacturers, including small and medium size enterprises that they would not be subject to unfair competition created by excess capacity in the other countries.”
Geetha Kannan, Managing Director – The Anita Borg Institute (ABI) India
“Over the past year many of the government’s policies and initiatives have been focused on digitization, technology, entrepreneurship, education, skills-development, sanitation and so on. The government has been riding high on drivers that are imperative to the economic and social growth of the country. We are yet to see deliverables on many fronts, but there is no denying that these steps are positive. In 2016 we expect the government to continue this growth orientation.
With more and more women joining the workforce and increasing their contribution to India’s economic status, we would like to propose ‘gender mainstreaming’ for Budget 2016. It is time we integrate the gender perspective to all relevant policies and initiatives, to promote equality between women and men. For example, the government had recently announced a Rs 10,000 crore fund for entrepreneurs during the release of the action plan for the Start-up India campaign. This would definitely help in encouraging and growing the number of women entrepreneurs in our country.
The ‘100 Smart City’ is another much talked about initiative and there are many expectations of increased funds for this project. We would like to see a specific focus on women-friendly facilities and infrastructure in the detailed roadmap of this project. There should also be budget allocations and incentives for creating women-safety mechanisms and devices, to ensure safety of our women in these smart cities at all times.
The Digital India initiative needs to have specific plans that will aim to digitally empower more women and girls right from the grass root levels. Year after year our budgets have always included women empowerment and support for the girl child. Our union budget has to get more aggressive on women–specific policies and measures that are lucrative and impactful in encouraging the full-participation of women in all spheres of life.”
R Chandrashekhar, President – National Association of Software and Services Companies (NASSCOM)
“Startups be exempted from direct and indirect taxes including MAT, a move that would reduce compliance burden and reduce cash outflows. Further there is an urgent need to remove angel tax that serves to tax the capital receipts, when the availability of financing from recognized sources such as Banks and Venture Capital Funds is unavailable and angel funds is the only available source.
Similarly, NASSOCM strongly recommended that companies may be allowed to carry forward losses even if there is change in ownership structure, if it for capital infusion in the entity. Policy regulations like ease of compliance, reliance on self-certification instead of audits, tax exemptions for startups will allow entrepreneurs to devote their time, energy and resources to build upon their innovative ideas.
With the number of tech start-ups in India growing over 40 percent over the last year, these startups can potentially develop innovative solutions to address the development needs of the country as startups focus on development solutions for health, infrastructure and energy amongst others.
The Government’s stated vision on migration to a cashless economy is an opportunity for the nation to adopt technology and the Industry to develop innovative solutions. Internet driven start-ups dominate the entrepreneurial ecosystem today, developing disruptive solutions and business models.
This gives rise to interpretation issues in case of applicability of taxes – similar to what the IT services and product Industry continues to battle with. Ecommerce is a powerful instrument that encourages people to transact online, offering traceability and transparency. However, there are disturbing trends whereby States are considering taxing ecommerce transactions thereby introducing barriers to technology adoption.
Therefore, NASSCOM proposed a high level committee to evaluate of emerging trends and technologies, which should be should be institutionalized to provide inputs and triggers for policy roadmaps. Regular dialogue has also been recommended between relevant Government agencies and various stakeholders to keep the regulatory framework abreast of the times.”
Shailaz Nag, Co-founder & COO – PayU India
“Today, India has a critical mass of people who are online and have access to electronic instruments of payments. With Digital India, we have the right platform to move from a cash dominated economy to a less cash economy in medium term & a cash less in the long run. RBI and Govt have been very pro-active in facilitating innovations in electronic payments. Indian consumers have often surprised the conventional wisdom when it comes to adopting new ways of doing things – telecom, internet. If right incentives on both supply (Merchants) and demand (Customers) side are announced in this budget session, it would push the quick and wide adoption of electronic payments.
With the launch of Startup India, we are very confident about Govt’s focus and due importance to Startups. We would like to get more details on operationalization of Startup India. It is fairly certain to say India could soon emerge as one of the top three Startup hubs in the world given its natural inclination for Enterprise and support of establishment.”
Anil Valluri, President – NetApp India & SAARC
“To my mind, this budget should see the Government take further steps to accelerate its flagship initiatives which have been structured holistically in the form of JAM to reach the last mile and transform lives of every citizen. Start- up India was an excellent example of the Government proactively putting it’s might behind India’s up and coming entrepreneurs who are brimming with new ideas.
Of particular interest is the further steps to make Digital India a distinct reality coupled with the pace of Infrastructure building as these will propel growth across various sectors. I am optimistic and look forward to India continue its march to be a leading economy on the global map.”
Samir Dhir, Executive Vice President, Chief Delivery Officer & Head – India operations – Virtusa.
“In its pre-budget expectations Virtusa has welcomed the many initiatives of the government in digitizing India.
India is on the cusp of major transformation with IT services in the forefront. As the world’s largest sourcing destination for IT, India accounted for about 67 per cent of the US $130 billion market. That the sector not only contributes to the economic well-being of Indians, but also adds substantial value overseas is what the government should look at and create an enabling environment where these companies could compete globally on a bigger scale.
Appreciating the government’s thrust on IT, digitisation and technology-driven initiatives, Virtusa hopes that there would be concrete incentives for start-ups and tax-sops to propel the sector to greater heights. One of India’s major drawbacks has been poor research and development (R&D) base and it is not too late for the government to help create the base and also to assist companies investing in R&D by way of fiscal and financial incentives. R&D made substantial difference in the IT sector.
The Finance Minister should enhance budgetary allocation for the ‘Digital India’ programme as it will not only fuel economic growth but also will help bring about greater inclusiveness of the population. As the government understands the importance of IT in economic growth, we expect the budget to focus on expanding the digital literacy base, improved connectivity and access to technologies. The government’s programmes such as Start-up India, Smart Cities and Skill Development will have to rely heavily on IT services as never before and it would be in the fitness of things that IT services become an enabler.”
Ashok Chandak, Sr. Director Global Sales and Marketing – NXP semiconductors
“Owing to the rising interest of businesses in the Internet of Things, Connected Cars, Security and wearable computing, the electronics and semiconductor industry is growing rapidly. With initiatives like “Make in India” and “Digital India”, the country has observed an accelerated interest in localizing the designs and manufacturing in ESDM space over the last 12 months along with other sectors.
Several Indian and Global companies are showing a good amount of interest to setup the operations in India as Import still constitutes over 65% of the total electronic goods demand in India. With the trend of major reduction in Exports from India, the initiatives to reduce import duty burden on electronics will help the foreign exchange reserves and also currency stability.
However, the momentum needs to be sustained with policy aggravation at various levels of manufacturing, operations and business. Therefore, Budget 2016 is highly awaited where everyone is expecting policy level improvements to expedite growth. Manufacturing is key government focus and hence, it is important to rationalize Import Duty to promote the on-ground manufacturing and not just assembling.
This will enable greater access to better technology and will be a huge enabler to the ESDM industry to help provide superior technology to a wider audience at more competitive rates. With innovation and design being at the core of ‘Make in India’, we believe the government should promote R&D benefits to encourage more innovations from India and preference to Made in India products. Investment allowances for IT adoption can promote India as a premiere destination for both hardware and software development and hence, requires attention from the government. Early introduction of GST is also expected to bring a uniform taxation standard across India, which in return will boost the commercial transactions in the country and benefit both corporations and consumers.
In summary , the Government need to provide benefits and encouragement for enabling secure connections and secure infrastructure for a smarter India and deployment of the technology solutions that make lives easier, better and safer.”
BVR Mohan Reddy,Founder and Executive Chairman – Cyient&Chairman – NASSCOM
On The Industry
The FY 2016-17 budget is crucial for the IT/ITES and Engineering services industry. With this budget, we expect announcements which may foster a better business environment and increase the ease of doing business in India. The IT industry in the country has been facing several challenges due to lack of clarity in transfer pricing norms.
We are hopeful that the upcoming budget will address this and a few other essential elements like a correction in the prevailing highinterest rates of 20-30% for safe harbor margins. Furthermore, the foreign trade policies should include benefits of Services Exports from India Scheme (SEIS) for Software Technology Parks of India (STPI) units. Currently, without such benefits, STPI units are at a disadvantage as comparedwith their SEZ counterparts for the same services.
Boosting the Manufacturing Sector
The government should formulate better SEZ policies and incentives for the electronics manufacturing sector. India must make its R&D significantly more robust to realize the Make in India dream. The government should introduce suitable changes to address the inverted duty structure. The forthcoming budget should promote more R&D benefits so that organizations are encouraged to innovate and develop new technologies. Also considering the increasing level of threats due to cyber connectivity, the government needs to allocate a budget for the development of cyber security system.
The government has announced many initiatives for encouraging start-ups. Due to Initiatives like Start-up India Stand-up India there is a great momentum and enthusiasm amongst start-ups as well as investors. Start-ups are an important element of our economy and society today and rightly so. We have 7-8 unicorns in the country today, which was unheard of in the last decade.
The revolutionary growth demonstrated by start-ups necessitates the government to take more initiatives to address the pressing challenges faced by this community. Initiatives are needed in the areas of facilitating ease of doing business to further boost start-ups. Tax exemption on direct and indirect taxes including MAT, where start-ups lose a big chunk of cash flows is the need of the hour.
This will reduce compliance burden and reduce cash outflows. The government should further make a proposition to bring capital availability at seed level for start-ups. In the recent years, a pool of angel investors have emerged who are helping these start-ups work on new ideas. The FY 2016-17 budget has to encourage them by waiving off tax on capital gain, and should also allow carrying forward of losses even if there is a change in ownership structure, if it is for capital infusion in the entity.”
Rajarshi Bhattacharyya, Country Head – SUSE
“The IT industry heavily depends on the manufacturing sector and reforms which will boost this core sector is expected. More specifically –
Infrastructure: The sector would expect major announcements to support the ‘Make in India’ campaign. It will create more facilities that enable the movement of raw materials into the country and transporting the finished products out of the country. Thus, reforms will be directed towards effective and efficient connectivity between ports, better road and rail connectivity between ports and plants. This is also a golden period to do so, as steel and oil prices are at an all-time low.
Attracting investment in high technology, defense and aerospace: While Indian organizations have already proved their mettle in the auto and engineering sector; it is yet to see any major investment in high technology, defense and the aerospace sectors. Attracting investments in these sectors and making it easier for global companies to set shop in India is very critical as this can turn the country into a true manufacturing hub. Budget enablers in this area are keenly awaited.
Land reforms: It is one of the most critical factors which will enable multinational companies to set up manufacturing activities in India on a large scale. Though a lot has been said about it, a clear and practical win-win land reform policy is yet to see light of the day.
Boost SME segment: To truly create a backbone of manufacturing in India, it is important for the government to give enough incentives and support SMEs. They will create the multiplier effect for job creation.
Renewable Energy: We are still far from providing necessary power to the manufacturing industries to continuously run their operations. Though coal ordinance is paving the way for mining coal, essential steps and policy decisions to make coal mining output higher is assuming greater criticality on one hand, while environmental concerns on fossil fuel is rising on the other hand. Here too, reforms directed towards a win-win balance between the two are critical.
Uniform GST: Budget or budget session to bring GST to reality towards thrashing out the differences and meeting the April 2016 deadline.
Further, in addition to policy decisions and investment outlay in the budget, one of the key expectations will always be on Direct & Indirect tax concessions and sops.
Direct tax expectations: There is a need for rationalization of law with respect to taxation of royalty (copyright vs copyrighted article). Royalty / Fees for Technical Services should be reduced from the current 25 per cent to 10 per cent.
Development of ‘Special Economic Zones’ had at a sluggish pace in the last few years. Removal of MAT and Dividend Distribution Tax (DDT) on SEZ units and SEZ developers would give a fillip to development.
There is a weighted deduction for expenditure incurred on skill development to boost skilled manpower availability. This benefit is not extended to the skill development of existing employees. Technical development is a continuous process and accordingly, this benefit should be extended to expenditure incurred by companies for their existing employees as well.
Indirect tax expectations: There is huge stress on businesses for compliance with multiple state tax legislations and an early roll-out of ‘Goods and Service Tax’ is very imperative. An affirmation by the Government that GST would be rolled out in April 2016, along with indicative transition steps, would help build and reinforce positive sentiments.”
Aliasgar Hajee, Managing Partner, SHM Group
“India is on the threshold of exponential growth, with the entire world seeking an opportunity to collaborate with its growing might. Ease of doing business integrated with favorable tax reforms, which includes implementation of GST, removal of tax exemptions and keeping uniform tax rate across the board and reduction of unwanted red tape should be the areas of focus to attract FDI and more importantly support Indian companies to invest in its capabilities and grow its offerings. Infrastructure, rural development and enhanced security measures are the need of the hour and we hope the budget 2016 prioritizes these requirements.”
Syed Tajuddin, CEO, Coolpad India,
“Indian telecom sector currently boasts of being the second-largest telecommunications market in the world and has recorded a steady growth. There are some expectations that the industry has from the forthcoming budget 2016- 17, which will address some of the industry’s concerns thereby enabling the growth of the sector.
First and foremost, the government should introduce a clear and a time bound plan for the implementations to GST. With this, the government should create a single tax window for the movement of goods, since this would be essential towards freeing up red tape and letting businesses to choose a more flexible model catering to the market. Further, this reform would create employment opportunities in the telecom sector as well as give the companies confidence to grow fearlessly leading to the overall development.
Keeping in mind, the immense potential that the smartphones has to boost education and healthcare in the country, the government should introduce every possible reforms to ensure that it reaches in the hands of every Indian. We expect that the government will take measures to promote domestic manufacturing and investments in technology and should therefore make reforms in commodity tax as well as custom policies to encourage and realize true “Make in India” initiative. Especially for the foreign companies that are trying to make the market competitive and consumer centric by assembling SKD products in India should be benefit.
The telecom sector is not only a contributor to the fiscal revenue but it is a key tool for enablement of the country’s growth and we are hoping the current government will further facilitate the growth of the telecom sector.”