Industry predicts its “A Acche Din Wala Budget”
11 July 2014 – To support IT and Electronics industry in India Finance Minister Arun Jaitley presented the digital flavor in his Union Budget announced yesterday. Here are some important comments from IT and electronics experts..
Mr. Vineet Mittal, Founder President Solar Power Developers ASSOCIATION (SPDA)
“The overall sentiment in the industry post the budget is very positive; it is a very business-friendly budget.
We would like to congratulate the Finance Minster on putting together the vision of the new government on the critical sectors of the economy. Our complements for the great road map drawn up for the Renewable Energy industry as a whole and the special thrust for broad basing and up scaling the Solar power sector nationally.
To start with the proposed UMPPs in Rajasthan, Gujarat, Tamil Nadu and Ladakh in J&K with a budget of 500 crores is very encouraging. If the govt ensures issues of evacuation, land and availability of the water is taken care of – there will be a lot of players willing to enter this segment. Another positive move is the govt relaxing requirements of CRR, SLR, priority sector lending, because of this banks are now being able to issue long term bonds as loans for projects as long as 25-30 years!
There is good news for the manufacturers as well especially with regards to concession of duty. A concessional basic customs duty of 5 percent is also being extended to machinery and equipment required for setting up of a project for solar energy production. This will give a shot in the arm for the local manufacturers.
Even the issue on supply of power which was a major area of concern has been addressed – now instead of annual extensions – it has been extended by 3 years. This will give predictability to the tax implications. This stability in our policy will help the investors to plan their investments better.
An additional budget of Rs. 100 crores has also been set aside for the development of 1MW Solar parks on the banks of canals. Implementation of the green energy corridor project will be accelerated in this financial year to facilitate evacuation of renewable energy across the country.”
Mr. Ashok Chandak, Chairman, India Electronics and Semiconductor Association (IESA)
“India Electronics and Semiconductor Association (IESA) welcomes the budget aimed at boosting the Indian Electronics and semiconductor industry. The budget is growth supportive, anti-inflationary as well as committed to fiscal consolidation and reviving growth in manufacturing. We believe the steps outlined for this sector by the Hon’ble Finance Minister and commitment from the industry will put India is on the journey of becoming the “Design Led Electronics Manufacturing hub” by attracting investments, promoting entrepreneurship and creation of jobs. The speed and focus of Honorable Union Minister for Communication & IT and DeitY in capturing industry needs from the electronics sector is very heartening and is a major milestone towards vision of making India an ESDM powerhouse.”
1. Manufacturing incentives at 15% for extended period of 3 years for manufacturing company that invests more than 25 crore plus would create massive push to the MSME’s in electronic sector. This will lead to the inclusive growth of the electronic manufacturing clusters coming up in the seven states, setting up of electronics units, investment/employment opportunities in the non-urban parts of India and help build component eco-system.
2. Corrections of Inverted duty structure on few ITA-1 products such as TV’s Computers, Smart cards etc. and levy of 10% Basic Customs Duty on some of the Non–ITA 1 Telecom products aimed at making locally made products competitive, will boost manufacturing greatly.
3. 10000 Cr Start-up Fund with allow greater incentivization to R&D andIncubation centers that will spur the local IP development and product creation which constitutes almost 50% value addition for electronic products. Extended support of the government to the companies helping to create value byInnovation Led Designs in the ESDM ecosystem is commendable.
4. Support in the form of Investment Linked Deductions for Semiconductor wafer manufacturing units would help build the Semiconductor Fabs and ATMP units’ cohesive ecosystem potentially contributing to more than 40,000 crore FDI’s and job creations.
5. FDI in Defense sector is a huge step enabling local defense electronics manufacturing and competencies while attaining self-reliance as well as maintaining National Security. Funds of Rs. 5,000 crore allocated for defense outlay will give a boost to the modernization of the Aerospace & Defense sector.
6. We welcome Rs 500 crore funds for the Digital India program. This program’s focus on IT access to villages and broadband connectivity will provide the access to technology solutions, education and trainings through digital platforms thereby bringing the rural areas at par with urban ones.
7. Addressing Transfer Pricing issue will help global companies to invest more in India and also contribute to the innovations and competence development in the ESDM sector will contribute to ease of doing business, innovation & competence development in ESDM sector.
8. Additional announcements such as Smart cities, Power to each household through effective distribution, Industrial clusters will help ESDM industry achieve great heights by developing technology solutions for these initiatives.
9. We would like to see provision of ‘Deemed Export Status’ for electronic products manufactured in India to be considered by Government in future and corrections of Inverted duty structure being applied on all ITA-1 products.
IESA extends its commitment to work together with the union government to realize the vision of Development and Growth of Electronic Systems Design & Manufacturing (ESDM) sector.
All these will create tremendous ‘Design Led Electronics Manufacturing’ opportunities in India with increased investment opportunities and reduced electronics import bill. It is appropriate to say now that, “ELECTRONICS KE LIYE ACHE DIN ANE WALE HAIN”.
Dr. Kaustubh Nande, Country Marketing Head, ANSYS India
“This budget definitely addresses some long pending reforms particularly on tax and duty structure on electronic imports. However, today’s budget also extends investment deductions to semi-conductor wafer fabrication manufacturing units. This will boost electronics manufacturing and attract a greater share of R&D investments in the country. India needs to build intellectual capital in the long term and this budget perhaps is a good start. A positive and much needed boost to the electronics manufacturing and R&D sector.”
Vivek Varshney, Vice President & Global Head Telecom Practice at UST Global
“We feel that the new government has presented a progressive budget, which will help in creating an investor friendly environment and attract more foreign and domestic investment in the Telecom sector. Allowing FDI in telecom will attract more investment across functional technology areas like 4G and WiFi enablement of cities, railway stations and trains will create more opportunities for telecom solution providers like UST Global. Another key highlight of the budget is the creation of rural broadband vision which will allow telecom companies to be a part of inclusive growth and improve the penetration of technologies to rural households, thereby improving the living standards of the citizens. Government earmarking Rs 7,060 crore in this financial year for developing 100 smart cities in the country would also help create communication infrastructure.”
Mr. Subhasish Gupta, Country Manager-India & SAARC, Allied Telesis
“Union 2014 budget is very encouraging as it focusses on infrastructure; IT sectors and hopes to see increase in FDI limit as it would strengthen the Indian rupee. Modi government has outlaid a clear roadmap by allotting Rs 7060 to develop smart cities across India. This would be challenging for the ministers because this is vast, as they have to leverage technology in every part of the cities from core operations to applications. Willing to see new job opportunities in the market and new business in rural areas and hope the government will support Indian economy.”
Ravi Raj, Brand Head, Director Sales & Support, NetRack
“We welcome Modi government’s first budget, hoping for enhanced growth and connectivity. There is emphasis on entrepreneurship by funding start-up companies with Rs 10,000 cr. The government decision to come up with new accounting standards for Indian companies from FY 15-16 is appreciable. Additional emphasis on telecom, automation /ITES in the budget will open up opportunities in both IT hardware and software companies creating new jobs opportunities, especially in rural areas and simultaneously to see more expansion in infrastructure.”
Shibu Paul, Regional Sales Director – India, ME and SEA, Array Networks
“We welcome the union budget announcement from Modi government. We appreciate the current developments and congratulate the government’s decision to support and allocate funds for Internet connectivity in villages, for development of smart cities across India. The focus on tax rebates for low and middle income bracket and on infrastructure development will boost the growth. This is not sufficient as there is no specific allocation for promoting and implementing eGov projects on a timely manner. Government should concentrate on promoting local manufacturing of IT products and provide specific incentives for IT products and industry.”
Mr. P.G Lakshminarayan, Vice President-Finance, eScan
“The Budget looks pragmatic and realistic and was in line with expectations. Defined focus on domestic manufacturing & infrastructure, investment allocations to build Smart Cities & to increase broadband penetration of Indian villages, liberalization of FDI in ecommerce sector, promised actions to finalize GST this year, clarity on transfer pricing along with a collaborative framework to minimize future disputes etc., are all steps in the right direction and indicative of a positive start to a long-term process. To conclude, this Budget is quite optimistic with clear roadmap ahead and it will be quite interesting to track how it plays out eventually”
Puneet Dhandharia, Country Manager – India, Astrum Holdings Ltd
“We are happy with the government’s decision to encourage start-ups and entrepreneurs. Provision of 7060 crore for smart cities, creating venture capital fund of 10,000 crore for micro, small and medium enterprises and 100 crore for technology development fund will inspire many product based companies; also it increases the employment opportunity. This year, we can also expect support towards our production and research from GST law.
The focus on education, infrastructure and agriculture sector is really appreciable. Overall it’s a balanced budget and we are hoping to see the best execution of it.”
Sushmita Das, VP – Business, Kobian Pte Ltd
“Governments’ initiatives have given the Indian IT industry some reason to cheer the Budget 2014 by allocating Rs.7060 crore for smart cities, Rs.500 crore for bridging the digital divide, a 100 crore for technology development fund and several other e-governance. It is a good sign that there will be no additional duty on components that go into the manufacturing of PCs, as earlier; there was a 4 percent tax.
This year, we can also expect support towards our production and research from GST law. Online and mobile advertisements, digital/ web/ social media agencies will have additional service tax now; this may face a negative impact.”
Pankaj Jain Director, ESET India
“This time the Finance Minister has given a special attention to the software product industry. The announcement of Rs 10000 crore funds for start-ups is also a very good move. These initiatives would improve competitiveness among the Indian small and medium enterprises. Software product industry can aide many other industries like defense, electronics and communications etc.
Also we forecast a positive change, knowing that the government has recognized the existing tax related issues (Dual taxation).”
Subir Mahapatra, Vice President, Savera Marketing
“We warmly welcome the Jaitely Budget. It is recognized that middle class is the backbone of consumer economy. As we all know that boom in IT Industry with advanced technology decide the growth of country. For same Modi Sarkar is going to take good initiative in Technology space and announcement of 7060 crore for smart cities will help to create new job opportunities especially in rural areas. We can say that, this budget is very pragmatic and realistic which support the growth of country.”
Mr. Sundeep Popli, COO, LAPCARE
“We welcome the new Govt. first budget of structural reform aimed at reviving growth and connectivity. The hike in Tax exemption limit will provide respite to consumer and in turn, boost their spending power. This is encouraging for IT sector as well because it will help consumption and demand from consumers. We can say that, this Union Budget 2014-2015 comes with the optimistic approach and move by the Govt. for entire Industry.”
Vijay Shandilya, CEO, E-Vision
“This Budget sets out a clear direction for growth of country with major focus on scale and skill which helps to improve the capability of individual at the rural/small scale to make them self- sustained. We are happy with the Modi Govt’s decision to support start ups in Technology space, announcement of 7060 crore for smart cities and creating venture Capital fund of 10000 crore for MSME will inspire many product based companies which increases the job opportunity. It is much welcome step which are the potential of fuel future growth.”
Mr S. Sriram, CEO, iValue InfoSolutions
Given the constraints it’s a good budget with better priorities
• Great to see intent to move from government to governance
• Sticking to fiscal deficit target of 4.1% set by previous government does send a positive signal to the world on policy continuity.
• Good to see importance given to health, affordable home and education
• Good to see focus on building infrastructure which have been crippling development and progress such as road, power, ports, etc. Drinking water should also be included on this list
• Lower middle class have been bearing the brunt of sustained inflation effect on essential commodities. Tinkering of IT would help in making ends meet.
• Since GST is long overdue, timeline commitment was the need of the hour
• 10,000 cr for start-up promotion is a very good move since we need them to ensure enough employment opportunity to the largest working population of the world. Details awaited eagerly on this front. Angle/PE investment for start-up could have been simplified to promote this key segment.
• Nothing for Corporate on tax front.
• Promotion of multiple sports across many cities with good facilities is a welcome move
• More incentives required for making consumers participate in equity markets to reduce FDI/FII dependence over time
Mr Kiran Bhagwanani, CEO, Dimension Data India
“Growth is the fundamental issue and the budget had enough ingredients to stimulate growth in certain sectors of the economy. Increased focus on leveraging IT for public services will definitely help the domestic IT market in a big way. The major initiatives in this regard are Digital India, one hundred smart cities, national internet and the inter-ministerial e-governance initiative. Focus on reforms to boost investment in infrastructure will definitely have a huge positive impact on the overall market. Another key point in the budget is about skill development that should help us reap the widely anticipated demographic dividend. Within the given constraints I believe this is a very prudent, balanced and progressive budget.”
Mr Sandip Kumar Panda, CEO, InstaSafe
“The budget indeed does try to get India’s economy onto the growth path. The announcement of the special focus on Software Product Industry (SPI) is a positive step. Execution of the Rs. 10000 crore funds allocated for start-ups will be the key as India propels into a Startup Nation. It is evident that the budget believes that creating an environment conducive for strategic Industries like Defense, Security on the mention of Rs 100cr set aside for development of Technology Development Fund.”
