The Union Budget for 2017-2018 is out and Finance Minister Arun Jaitley has been widely applauded for the changes brought into effect on Wednesday, February 1. IBTimes India has covered the budget allocations for various sectors, including railways, real estate, defence, income tax, agriculture, rural development, Fintech and the rest.
The bold decisions taken by Jaitley in the latest budget are widely welcomed by all the sectors. The latest budget has received mixed reactions from the technology companies, most of them applauding the minister's announcements.
Here are some of the major tech company responses to the Union Budget 2017-2018:
"We were expecting Financial Budget 2017 to offer incentives to start inflow towards design led manufacturing in place of assembly led manufacturing ecosystem, but it seems government not yet convinced towards adopting multiple layered incentives for localization while increasing the duties on CBU (Completely built Units), overall based on the information available from the budget the impact of the policies seems to be neutral for mobile/tablet industry, at best.
There has been a 2% increase in duties levied on import of PCBA in India, which still will reflect only on one part of the manufacturing cycle with focus on assembly of mobile handsets. On the other hand, providing attractive incentives for localization of design and R&D capabilities would have bolstered the 'Make in India' initiative, and driven more handset makers to introduce design led manufacturing in India," Kuldeep Malik, Country Head - Corporate Sales International, MediaTek India, said
"Budget was overall a populist budget; a move in the right direction but short of expectations. Push for Digital transformation & financial inclusion is applauded but the government has deployed lot more sticks rather than carrots too to push the "less-cash" agenda.
I would have expected zero TDR for small value digital transitions. Investments in infrastructure, focus on Bharat & employment guarantee & women empowerment, political trans is welcome. Corporate tax break for SMES is very nice, and much awaited, it is important that government recognizes SMES to be the engine of India's GDP growth. Incentive for Startup fell short of expectations. There is not much clarity around FDI, FIPB so let's see how it pans out in coming days," Sanjay Sethi, CEO & Co-founder of Shopclues, said.
"It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from small shops to consumers is pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labour intensive sectors including housing, farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalisation is great step towards strengthening the financial system of the country. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits," Vijay Shekhar Sharma, Founder & CEO of Paytm, said.
"This year's Union budget is game changing and progressive. Demonetization is leading Indians to shift towards a Digital India. The cashback scheme and referral bonus to promote the usage of BHIM app will make citizens more comfortable with mobile wallets. This is extremely encouraging for company operating in internet space like us because no of Indians coming online will increase exponentially.
Our country is becoming the victim of hackers, the proposal of a dedicated Computer Emergency Response Team (CERT) for the financial sector is a beneficial move as it would help in keeping transactions safe and secure. Moreover, the extension of tax holiday from existing 5 years to 7 years will cheer up the start-up ecosystem. We wish the finance minister a great luck to implement all the progressive reforms," Sunil Kamath, Vice President - South Asia & Southeast Asia at Opera, said.
Sennheiser Electronics India
"The Union Budget 2017-18 significantly focuses on bringing socio economic development and digitalization in the country while emphasizing on the nine key initiatives for economic reforms — Farmers and rural population, youth education and job opportunities, poor and underprivileged, infrastructure, financial sector, digital economy, public service, prudent fiscal management and tax administration.
With increase in Foreign Direct Investment and Foreign Exchange reserve, India has now emerged as one of the fastest growing economy with an accelerated growth in 2016-2017.It is also quite encouraging to see that investment on infrastructure has been given priority at today's budget while focusing on the GDP growth," Vinu Cheriyan CFO & Director Operations at Sennheiser, said.
"The Union Budget-2017 carries significant prospects for manufacturing brands. The FM has included provisions meant to boost electronic manufacturing by promoting MSIPS and EDF. Such policies would further receive funds worth 745 crores in FY18, hence, promoting indigenous manufacturers and attracting innovation and technology prowess engineered by foreign countries. And while the manufacturing sector celebrates policy changes, we further appreciate the streamlined delivery of these products, via the GST bill.
These announcements are further in sync with the overall emphasis on transitioning India into a digital economy, empowered with fast internet access, cyber-security and access to smartphones. It is heartening to see the union budget for FY18 support the right to progress by shifting the focus back on to rural economy and agriculture; which truly resonates with our brand proposition. The provisions put forth in the budget are going to improve the buying capacity, digital lifestyles and affluence of the rural India and we at itel, welcome these changes and look forward to the promising year ahead," Sudhir Kumar, CEO of itel Mobile, said.
"I welcome the budget and appreciate the clear commitment shown by the Government towards fueling the growth of digital adaptation by focusing on underlying infrastructure. This is reflected in the availability of more spectrums and 10k crore worth of budget allocation for fiber optic laying beyond the already laid 155000 km. The availability of bandwidth will help Indians adapt to the digital lifestyle and thus, will help in the growth of the entire ecosystem. Additionally, the rebate in tax for people, especially the ones at the bottom of the pyramid will increase their in-hand disposable income a part which will also be spent on mobility, data, and entertainment, further working for the benefit of the OTT players," Abhesh Verma, COO of nexGTV, said.
"The government's move to enable startups, incorporated after 31 March 2016, avail of a three-year tax holiday in their first seven years is quite commendable. We also welcome the new relaxations provided in terms of carrying forward the losses. The government's efforts to digitise India and promote digital payments should go a long way in boosting the country's economic growth.
However, the 5% corporate tax reduction is not relevant to most startups that have not yet begun generating as much revenue. Government should now start thinking about how to reduce startups' real cost in the early years. In my opinion, income tax slabs should be made completely flat. Tax rates should not increase with increasing income," Mayank Bhangadia, CEO and co-founder of Roposo, said.
"We will call it a balanced budget, which will drive growth with prudence and addressing needs of the poor. The major thrust on Capex growth of 25% should drive demand. The focus on infrastructure and rural areas are welcoming. We did not hear much on cyber security with a greater push on the digital transaction, but for the creation of CERT. We still think a lot more focus is required on this front," Sriram S, co-founder and Director at iValue InfoSolutions, said.
"I am overall happy with the budget, the increased focus on cashless economy and move towards digitization is very much appreciable. I will call it a forward looking budget with the balanced Tax soaps, IT rebates, focus on rural areas and SME development. Also, the reduction in tax for companies with less than Rs. 50 crore turnover, which will now be placed at 25% is a big win for MSME sector and around 96% of the companies will be benefitted by this major announcement," Shibu Paul, Regional Director (IN , GCC & SEA ) at Array Networks, said.
"The Union Budget 2017 has taken a step towards making healthcare not just affordable but structurally robust as well. However, technology could prove to be a disruptive factor in assuring that the healthcare reaches out to those who have been hitherto isolated from it. But, unfortunately the budget has completely overlooked the health-tech startups which are changing the landscape of healthcare industry in India. With a focus on transparency and reach, they have been deprived of an opportunity to make an dent in healthcare ecosystem," Ravi Virmani, MD & Founder of CrediHealth, said.
"Overall a very positive budget. Reduction of corporate tax rates from 30% to 25% for MSME firms will definitely encourage investors and corporates. Some of the steps taken will definitely increase foreign direct investment and lead to employment generation which will be good for country," Rishi Bhatnagar, President at Aeris, said.