Technology, financial and security leaders share their views on India's new budget
Prakash Mallya, Managing Director, Sales & Marketing Group, Intel India
“Today’s Budget clearly pivots on a digital-first India, and three recommendations made by the FM relate directly to the potential we see in the country. First, the NITI Aayog effort to institutionalize research and development in artificial intelligence reinforces the value that machine learning can bring to issues of national importance. If synergized with the work being done by the academia and industry, we can expect fast emerging use cases that can democratize AI in India. Second, exploring the application of blockchain in governance is a strong indicator of the government's intent to improve citizen services without compromising on security, especially as Aadhaar gets linked to citizen accounts. And finally, the DoT’s establishment of an indigenous 5G center is an encouraging sign of the government’s view of collaboration with the broader technology ecosystem as the best strategy to accelerate the rollout of 5G infrastructure in India.”
Neeraj Dotel, Managing Director, India and SAARC, SAP Concur Technologies
“This is perhaps the most-awaited budget in the recent history with the country gearing up for the FM’s first budget post demonetization and GST - two of the biggest reforms of the Government of India. The budget FY 18- 19 did not have many surprises, but must say some of the initiatives are quite welcoming. The government is quite bullish on Digital India & Green India Mission. We see an increased focus on compliance and reduced time for filing tax and dependency on paper receipts, which will help propel the business processes. We also laud the initiatives towards the national programmes focusing on R&D and innovation and the increased focus on AI, ML and data sciences
Ease of doing business with a focus on MSMEs and increased rural lending capacities by the Banks and Institutes are clearly high on this year’s agenda. The MSME sector getting Rs 3,794 crore in the form of capital support and interest subsidy is a welcome change. This would give a much-needed push to the sector. Easing the corporate tax procedures for companies, will help bring down the burden of businesses and boost their revenues. For the direct tax-payers, introducing similar scheme for professionals with a greater focus on compliance to streamline the tax structure, will further boost paperless and e-transaction in the country and in turn reduce the carbon footprint.”
Mitesh Shah, Head of Finance, BookMyShow
"The Union Budget 2018 is both populist as well as pragmatic. It focuses on growing the promising rural economy and extending digitalization to rural citizens which can yield great results in the form of increased household rural consumption, and thereby providing internet driven businesses with a great potential market opportunity to tap. Increasing allocation for digital India and the overall strong thrust on digitalization is a welcome step. Initiatives such as High speed connectivity and Wi-Fi access to 5 Cr rural citizens and tax disallowance on cash expenditures above Rs. 10,000 for all entities now also give digital movement a great push and will benefit internet businesses. However, some more direct incentives for promoting digital ecosystem in form of lower MDR or cashbacks would have been welcomed by online platforms as well as merchants.
The move to levy 10% LTCG is commendable in the larger interest of the Economy and Fiscal situation. Another significant change proposed in the budget is inclusion of ’Significant Economic Presence’ in the definition of ‘Business Connection’ whereby even digital presence of Non-resident enterprises in India through digital platforms shall be construed to be taxable presence irrespective of whether or not the non-resident has a place of business in India or render services in India. This provision will bring about paragon shifts in nexus rules under DTAA.
There is also positive news for startup ecosystem as the benefit of dedication u/s 80-IAC is extended to startups incorporated even after 1st Apr, 2019 but before 1st Apr, 2021. The budget also brings lot of clarity around tax administration and rationalization as well as relief from MAT for companies admitted under Insolvency Resolution Process. With 99% of corporates now being covered under the reduced corporate tax rate of 25%, the Finance Minister has substantially lived to the commitment of rationalizing corporate tax made in 2015.”
Aniketh Jain, CEO & Co-Founder of Solutions Infini Pvt. Ltd.
"Cryptocurrency is not a legal proposition and the usage of the same is discontinued by the government. However, the usage and need of block chain technologies is not discouraged and will be looked upon case by case, which is a positive sign. cryptocurrency which is powered by Bitcoin is the digital currency that has raised quite a buzz in the investment market. According to reports, several banks posses frozen account cryptocurrencies in India while ROC (Registrar of Companies) has stopped companies to act in such exchanges. The underlying assets of cryptocurrencies have been volatile with heavy price fluctuations. The roots of the cryptocurrencies and the related transactions are not extravagantly transparent making them more questionable. Hackers are gaining most out of this scenario as the difficulty of tracing the roots of accounts and transactions are very high. There have been several instances where the accounts of the investors have been prone to hacker attacks and there's no established mechanism to revive the accounts from the hackers. The vulnerabilities of losing the money invested in these accounts is extremely high as there are no pre conceived notions to revive the hacker's attack, paving them ways to swag the wealth."
Arvind Bali, Videocon Telecom and Videocon WallCam
"The budget has a clear push towards socio-economic growth of the country with aggressive focus on agriculture, education, rural economy, healthcare and infrastructure. The allocations aimed towards rural India will increase consumption which boost industries and help in nation building. Focus on digital solution and new age technologies is a big push in terms of creating the right environment for the next level of development in India. The increase in customs duty will further boost 'Make in India'."
Vijay Thadani, VC and MD, NIIT Ltd
"It is a progressive budget with the right emphasis on training of teachers, use of technology and funding for research.Among the positive steps for the education sector, Revitalising Infrastructure and Systems in Education (RISE) by 2022 with a total investment of Rs 1,00,000 crore in next four years stood out. The fact that the Higher Education Financing Agency (HEFA) would be suitably structured for funding this initiative is a much appreciated provision. Increase in digital intensity in education and envisaging move from ‘‘black board’’ to ‘‘digital board’’; using technology to upgrade the skills of teachers through a digital portal "Diksha"; national program on artificial intelligence under the aegis of Niti Aayog; mission on Cyber Physical Systems and a test bed for 5G technology at IIT Chennai were among the other encouraging initiatives."
Thiru Vengadam Regional Vice President India, Epicor Software Corporation
"We welcome the governments proposals in the Union Budget 2018-19 that incentivise MSMEs. The budget proposes bringing down the corporate tax for firms that reported turnover up to Rs 250 crore , thereby reducing tax burden on MSMEs. Further the government has allocated funds for 2018-19 for credit support to MSMEs.
For MSMEs technology is an enabler for business growth and technology adoption is seen as a top priority. However, MSMEs are often unable to utilize the opportunities available through technology due to lack of working capital finance. The budget proposals of access to credit and tax breaks to MSMEs will help reduce capital constraints and encourage investment in IT solutions such as enterprise resource planning (ERP) to help them work smarter, operate more efficiently and be innovative.The Budget announcements will further encourage technology vendors such as Epicor to continue adding value to medium sized businesses through technology offerings that help them grow now and positions them for success in the future."
KK Mookhey, CEO & Founder of Network Intelligence
“The move to make cryptocurrencies illegal is a major announcement; it is likely to create a negative impact on the price of these currencies, especially Bitcoin. A better idea may have been to come out with some sort of a regulatory framework around cryptocurrencies. On the other hand, the point raised by the Finance Minister about exploring the usage of blockchain technology for payments is a very good initiative. It will support homegrown technologies who have already invested in the technology and will attract new investments in this technology. It is a positive sign to see that 5 lakh wifi-hotspots will be set up covering 5 crore rural citizens. This falls in place with the country’s Digital vision. We would have liked to see more substantial movement on setting up the CERT-Fin for the financial sector.”
Rajan Navani, Vice Chairman and Managing Director of Jetsynthesys
“Budget 2018 demonstrated the commitment of the government on Digital India by doubling allocation, developing an increased focus on new technologies including artificial Intelligence and blockchain. The contribution of new age businesses and technologies over the next decade to GDP will be significant as will be the ability of Indian companies to be part of global supply chains through value added technologies. All of this will result in more entrepreneurs and additional jobs that will drive the future of a New India.The incentive provided to 5G, increased Wi-Fi hotspots and smart cities will drive greater data consumption which will particularly benefit the online and mobile gaming companies in India.
ModiCare, different from ObamaCare, is something that should have been done in India long ago. The one item a common man doesn’t budget for is unexpected healthcare costs for family members and many a times it completely messes up his finances. Providing a cover of ₹5 lacs to 10Cr families is indeed the highlight of this budget 2018 and will be a game changer for India if implemented smartly and efficiently.
Further, in our land of frugal innovation in healthcare, the same can happen at a fraction of the cost in western countries.”
Gaurav Hinduja, Co-founder of Capital Float
“The Government and the Finance Ministry continues to identify the MSME sector as being critical towards increasing GDP & employment. The recapitalization of the PSU banks up to Rs 5 lakh crores and allocation of Rs 3 lakh crores in MUDRA loans ensures a higher availability of formal finance for credit-starved MSME segments. Another huge step towards boosting the growth prospects of MSMEs is the reduction of corporate tax to 25% for enterprises with a turnover of up to Rs 250 crores. The development of unique identities along the lines of AADHAAR for individual enterprises will enable us to further our efforts towards financial inclusion, as we can extend digital credit services to MSMEs with little to no documentation. The extension of Kisan Credit card to fisheries & animal husbandry farmers and the allocation of Rs.10,000 crore for fisheries & aquaculture, animal husbandry funds further adds to the Government’s efforts towards absorbing more segments into the formal financial ecosystem”.
Kiran Deshpande, Co-founder & President - Mojo Networks
“The government’s budget for 2018-19 has a special emphasis on increasing digital intensity in education. Wireless communication technology has a big role to play in enhancing interactivity in at all levels and in creating smart campuses. Additionally, providing WiFi in trains, increasing broadband access through WiFi hotspots to 5 crore rural citizens and connecting 1.5 lakh more villages under BharatNet initiative is a step forward towards digitizing India.” He further added, “Also reduction in corporate tax to 25% is a huge boost and will benefit the entire micro and small and medium enterprises which amount for 99% of the companies filing their tax returns.”
Adhil Shetty CEO and Co-founder BankBazaar
“The budget overall is positive. There is visible support for Fintech industry as the FM specifically mentioned that Fintech is playing an important role in countries growth and hence announced setting up a working group for its growth. The biggest announcement was about insurance and Rs5Lac is a great mediclaim amount and 50 Cr individuals is a great target. This will create tremendous awareness for medical insurance. Also, reduced corporate income tax for companies with revenue up to Rs250Cr is a big one. There are couple of points which will raise questions. The 3.5% fiscal deficit in FY18 and 3.3% fiscal deficit target in FY19 is slightly higher than expected which will impact the borrowing cost for Private sector. Second, introduction of tax on LTCG exceeding Rs. 1Lac after 14 years.”
GB Kumar, Vice President – India and APAC at Prysm Inc
“The one key takeaway from Union Budget 2018 is clearly the envisioned rise of India as a connected and technology-driven nation. There is a clear focus on creating a digital economy through sizeable strategic investments in developing the requisite infrastructure. With the government’s enhanced commit to the Digital India scheme – an allocation of INR 3,073 crore, and the successful selection of 99 cities (out of 100) for the Smart Cities initiative – we believe we will see expedited implementation of Connected Cities. Another commendable announcement was the allocation of INR 10,000 crore to the Bharatnet project and establishment of 5 lakh Wifi hotspots in rural geographies. The government’s announcements that promote digitization through greater connectivity, will fuel uptake for collaboration and remote working solutions resulting in a more productive and connected India.
We hope Government will actively encourage emerging technologies such as block chain. This is important for Indian tech industries and start up ecosystems to flourish. Overall, it is a progressive budget, something that puts the onus on the Indian Information Technology industry and also benefit from.”
Dr. Srikanth Sundararajan, Partner, Ventureast
"The budget addressed a few aspects at a very high level, the creation special hybrid vehicles which would optimize taxation for foreign investors is very welcome news. All other aspects was addressed at a very high level, including the mention of a new regulatory body under SEBI. Unless there is more clarity provided very soon, the situation will not be optimal for both start-ups and investors. For example, GST norms have to be relaxed, in terms of reduced rates for start-ups, as well as the ability to file on an annual basis, there was no mention of this. There was no mention of not implementing angel taxes, no mention of giving the angel investors vehicles towards reduced taxes or no taxes if they could roll over gains to other start-ups. Most countries allow this as it keeps a perpetual line of early stage funding open to start-ups.
It also appears as if more regulatory bodies are being set up like the body under SEBI, hopefully this does introduce more processes which may not bode well for start-ups, and funds. It is good to note that there is a focus on technology, especially AI/ML, details unfortunately were also missing, Would there be special government funds focusing on AI/ML which VC funds could leverage, would there be a focus around skills development for the next generation to take advantage off. Once again, clarity would be most welcome, and that too in a timely manner.
In conclusion, the next level of details need to be articulated soon with a focus on helping start-ups attract investments, optimize their cash flow and scale. This is very critical for the future if we want start-ups to be the back bone of our new economy."
Sapan Gupta, National Practice Head - Banking & Finance, Shardul Amarchand Mangaldas
“Capitalising on the block chain technology could open new ways of securing peer-to-peer lending transactions, boosting trade finance, fintech and information repository sectors. By segregating the use of block chain from crypto-currencies reflects the government’s intention to use the technology in a gradual and safer manner, before it gets into concepts like replacing currencies.
In the current stressed situation of banks, capital markets can mitigate the negative effects by providing access of finance to corporations. RBI and SEBI shall now take steps to promote bond financing.”
Prof. Ashutosh Dash, Associate Professor, Finance, MDI Gurugram
"The budget speech indicates government to focus on the rural sector to create more jobs by 2020. This will require more fund allocation towards the education sector and human resource development sector. The government should also continue creating the environment that ensures ‘ease of doing business’. This will lead to more investments by the private sector and create further jobs for the students completing their formal education."
Padmanabha Krishnamurthy, CFO at Paladion Networks. Paladion Networks
"The 2018 budget has a strong focus on Agriculture, Healthcare, and Rural Development. I believe this will contribute to the holistic growth of India. The reduced corporate tax rates to the MSME sector is welcome, but I hope it is in the books to extend this benefit to all companies soon. The continued focus on digital growth by the Government including a special focus on Cyber Security with the launch of Centers of Excellence is a huge necessity for India and I am happy to see it in this Budget. Finance Minister has tried to keep the fiscal deficit within the target limits. Overall it is a prudent and growth-oriented budget. "
Dr. Keshab Panda, CEO & MD, L&T Technology Services
“We welcome the government’s thrust on encouraging R&D pursuits in the areas of AI, machine learning, robotics and edge analytics. This move will further leapfrog the innovations in this space that is significantly driven by Indian companies and will place the country at the centre of global digital transformation focus.”
Ramesh Mamgain, Area Vice President, India and SAARC Region, Commvault
"Doubling allocations towards Digital India and enhancing the National Mission on Cyberspace Security sets the tone to protect the data of India Inc. and its citizens. Unique IDs for companies will definitely go a long way in contributing towards interest of the nation and increasing transparency by corporates. Commvault, with its global industry leading solutions, is also committed to partnering with the GoI and India Inc. in building a robust data protection framework."