Finance Minister Arun Jaitley today presented the Union Budget 2015 in the Lok Sabha. Keeping in line with Prime Minister Narendra Modi’s “Make in India” project, Jaitley has announced reforms that are set to make locally manufactured mobiles and tablets cheaper. Furthermore, he has also announced that Digital India is making good progress, and to accelerate it further, the National optical Fibre Network project will be expedited across the country.

Jaitely announced new schemes like Atal Pension plan, Jeevan Jyoti Bima Yojna, Gold monetisation scheme and Atal innovation mission among many others. He talked about reviving startup culture, starting the second unit of the Kudankulam nuclear power station, five big MNREGA schemes and declared Rs 1000 crore in the Nirbhaya fund. Jaitley plans to incentivize debit and credit card transactions, to promote cashless society. He plans to extend visa on arrival service to 150 nations, from 43 countries currently. He also suggested setting up of AIIMS, IIMs and IITs in different states to boost education. He even suggested setting up an animation and gaming institute in Andhra Pradesh.

After Jaitely finished chalking out the financial plan for next year, the big-wigs from the Indian tech industry shared the first observations of the budget. The general consensus was a pleasant one, with praises to Jaitely for his attention to detail, but the industry stressed that effective and timely implementation is key.

Boost to Digital India, Make in India and Skill India
“Speedy implementation of the national fiber optic network will enable more rural communities to benefit from the ecosystem of services that can make governance more effective. The trinity of Jan Dhan – Aadhar – Mobile that the Finance Minister referred to, is indeed positive in a mobile-first, cloud-first India,” Bhaskar Pramanik, Chairman of Microsoft India said.

“The Government has also shown its commitment to skill development to equip the nation’s youth to take advantage of economic opportunities. The formation of the National Skill Mission that will consolidate efforts and outcomes and budgetary allocations to financially support youth in their skilled efforts will enable the country to benefit from its demographic dividend. The focus on job creation through the Make in India program, and providing gainful employment to India’s youth is commendable and a future oriented outlook. The Finance Minister has focused on the ease of doing business in India. We look forward to policy moves in the coming year that rationalize and streamline approvals for setting up business that can help investments and boost economic development. I am positive about the reaffirmation of the Government’s commitment towards PPP as a key drive of infrastructure creation. This would provide more opportunities for innovation-led companies to partner in India’s growth,” Pramanik added.

Hyun Chil Hong, President and CEO of Samsung India Electronics said, “As a company with deep investments in India, Samsung sees this as a progressive budget, one which provides an enabling business environment for foreign investment. It further motivates us to take our ‘Make in India’ story to the next level. In addition, we remain committed to continue to push technology boundaries to ‘Make for India’ leveraging our global strengths for the benefit of the Indian consumers.”

Amar Babu, Managing Director, Lenovo India felt that the Budget 2015 is a positive and balanced budget that touched upon many areas of infrastructure, universal social security vision, insurance for all, education among others. However, he had some worries, “From an IT industry perspective, it is a mixed bag with the inverted duty structure being finally addressed with the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2% without CENVAT credit are positive steps to encourage tablet manufacturing in India. However it disappoints as no initiatives have been taken to increase PC manufacturing and promote exports.  In this budget, we might have missed an opportunity to drive ‘Make in India’ in computers. We could have improved capacity utilization of existing facility if we had the right enabling structure for local PC manufacturing,” Babu added.

‘Government has listened to stakeholders’
Mobile handset maker Micromax feels that the Union Budget 2015-16 was very critical as it outlines new government’s commitment to reinvigorate the economy, kick-start investment cycle and also maintain fiscal prudence. “They have the advantage of a stable political regime and lower inflation, courtesy oil prices! In the light of this two things that I expected from the budget were growth & infrastructure enhancement, including the Digital infrastructure like access, back haul & storage. My first reaction after hearing the budget speech of Finance Minister is that government is making a concerted effort to ‘listen’ to the stakeholders. It’s a sincere approach to problem solving with growth, competitiveness, inclusiveness, realism & long term transformation at the core. If we reach the forecasted levels of 8.00-8.50% GDP growth we will not only be the fastest growing economy in the world but would be growing discretionary incomes and thus the domestic consumption. Though, there could be some disappointment with the fact that the set targets on curtailing the fiscal deficit will not be met, but I guess Finance Minister is being honest & pragmatic here still outlining a very measured, but positive approach for the future,” Sanjay Kapoor, Chairman of Micromax said.

Cashless economy a positive push
Talking on Jaitey’s cashless economy, Pramod Saxena, founder of Oxigen digital wallet services said, “In continuation of the PM Jan Dhan Yojana, we believe that this is an additional positive push to promote cash-less transactions and usage of digital money. The digitization of money at lower level and the JAM trinity (Jandhan, AADHAR and Mobile Access)  will redefine and transform the economy to cashless. This will help in further alignment of the mobile wallets, cash in and cash outs and overall the mobile technology. We at Oxigen operate through Mobile, Pcs, Biometric point of sale terminals and BCs. Furthermore, our cash in/ cash out ports will further assist us in materializing the cash less dream. We are very positive on this push and support digitization at all level.”

R Chandrashekhar, President of NASSCOM said, “The government continues its focus on leveraging technology for development and governance goals. Announcement of electronic Trade Receivables Discounting System (TReDS) for SMEs, cashless economy, expanding direct benefits through JAM, implementation of GST from 1.4.2016 etc are some welcome announcements.”

While he generally praised the Budget, things like the increase in tax rates for both service tax and net corporate tax rate, and the continuation of angel tax concerned him.

GST will rejuvenate industry
Keshav Bansal, Director, Intex Technologies​ felt that the budget was big and bold in its proposals with a good vision. “The much awaited GST announcement for April 2016, will surely rejuvenate the industry as manufacturing sector will become more competitive and support the ‘Make in India’ initiative, it will be interesting to see how it will be rolled out in the coming months. Another complementing factor was the focus on skill development, National Skill Mission will be a great initiative to develop youth employability thus contributing to the growth of our country. With focus on growth and job creation, it is sure to drive India’s global competitiveness,” Bansal said.

Y Guru, Chairman of Celkon Mobiles says,  ”From the industry perspective, reduction of the corporate tax from 30% to 25% is appreciated. GST implementation is another welcome move which will end taxation uncertainties in a lot of aspects. High allocation for infrastructure projects such as roadways and railways will give further boost to manufacturing. Reducing the CVD on certain goods in another area the industry is looking forward to, however more clarity is needed in terms of its implementation. Having said that; the budget missed considering the challenges faced by the telecom industry.”

Implementation is key
“We must hold the Government accountable for delivering on their budget promises.  Many of the announcements made in previous budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented.  It is nice to make a mention of the measures for dispute resolution in the speech, but the key is implementation. We will also need to see if some of the other Tax related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have of driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20%,” Bhaskar Pramanik said.

Sanjay Kapoor of Micromax also felt that implementation in key. “In summary, I see this to be a competitive & growth driven budget for which I congratulate our FM. Budget is not just a one day event but a continuous process with clearly defined objectives and predictability. The delivery however is contingent to flawless implementation. Union budget 2015-16 is true to Mr. Jaitley statement, which said, “It is India’s turn to fly,” he said.

IMPORT:-BGRindia