Budget Overall Positive For Industry, Say Experts

The new Government announced its first Union Budget today. Finance Minister announced that the Government hoped to raise Rs 45,471 crore in the current financial year from communication services, which includes revenue from spectrum auction and one-time charges.

Besides, the Government also announced Digital India initiative which hopes to provide internet for all across various social sectors. The government also announced a Rs 7,060 crore fund to set up 100 smart cities.

Here are some reactions from the industry:
Morten Karlsen Sorby, CEO of Uninor
We believe that India is ready for internet for all and we welcome the Government’s focus in this direction through the Digital India initiative. While we expect this effort to require more investments than the Rs 500 crore earmarked at this initial stage, this is certainly a good beginning towards internet for all. Internet in villages will not work unless it is affordable internet for all and this is where the telecom industry must partner the Government through innovative technologies and business models.
Edgar Dias, Regional Director, India at Brocade
It's a promising budget with initiatives to enhance connectivity by building infrastructure to bridge the gap between rural and urban India. The smart cities and digital India programs of the government will ultimately create an economic value for the country by aiming to increase employability and reducing immigration. (It's) good to see empowerment of the rural areas for businesses to flourish for a speedy economic growth. The measures to boost domestic manufacturing sectors, revive SEZs, support start-ups and set up new industrial clusters are all initiatives towards creating a progressive and advanced India.
Pramod Saxena, Founder and CMD, Oxigen Services India
"The budget sets out a clear direction for growth with minimum scope for speculation and changes. The financial inclusion agenda gets a boost with the proposal for setting up of differentiated banks /payment banks. Acceptance of Aadhaar and low-cost cash out infrastructure will make the payment bank a reality and we will look to government's acceptance of this as an essential infrastructure to support investment in this sector. Further emphasis on automation/ITeS in the budget will open up opportunities in the mobile application and mobile wallet usage.
Arup Roy, Research Director, Gartner India
Overall I would view this budget to have a positive push for industries across the board and it augurs well for IT industry as well. This budget focuses clearly on growth, development and job creation with particular focus on infusing growth in manufacturing and infrastructure sectors. From an industry perspective, the policies that would have major positive impact on the domestic IT uptake are: ‘Digital India’ program; “Good Governance”; and “one hundred smart cities” programs.
Jaideep Mehta, VP and General Manager, IDC South Asia
IDC welcomes the Union Budget as a positive step forward in the government’s efforts to revive the economy and promote economic growth. The emphasis on the infrastructure and manufacturing sectors is particularly welcome as these are foundational for a nation at India’s stage of economic growth.

From a technology sector perspective, the budget has several proposals which are positive:

  • The outlay of Rs 7,060 crore on Smart Cities will not just push the frontier of urbanization in India but also create a new set of markets for tech players across the industry spectrum. We estimate a minimum of Rs 2,000 crore flowing into the technology sector on the back of this initiative.
  • The e-governance program to inter-link all ministries and departments is welcomed. India urgently needs to improve the efficiency of government functioning. While the details are yet to be made available, this initiative is likely to yield several hundred crore of revenue to the IT industry.
  • New employment and wealth creation opportunities will abound in the start up eco-system with the Rs 10,000 crore fund created to boost start ups and SMEs.
  • The duty reduction (from four percent to zero) on imported PC components will give local electronics and computer manufacturing a boost. With the electronics import bill expected to exceed the oil import bill by 2025-2028, such measures are urgently needed. The net addition to the manufacturing base, job creation and cheaper PCs are all excellent outcomes of this budget proposal.
  • However, the education cess on imported electronics, including PCs and smartphones, will challenge consumption growth as it will increase street prices.
  • The spread of the Internet to rural areas will greatly enhance the quality of life for the communities. In this context, we welcome the National Rural Internet and Technology Mission with the fund allocation of Rs 500 crore. Over time, this will boost both the IT and the ecommerce sectors.


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