Home Budget 2021 Post Budget Reaction: Technology Sector

Post Budget Reaction: Technology Sector

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Budget 2021

The Finance Minister Nirmala Sitharaman presented the Union Budget 2021 on Monday where she made a lot of announcements for various sectors. This was the first budget after the pandemic where everyone had some expectations from the finance minister. Here are the reactions from the Industry experts of the Technology Sector.

Karthikeyan Natarajan, President and Chief Operating Officer, Cyient – 

Coming out of the pandemic year, the Finance Minister has laid down a well-rounded Budget.  Focus on setting up of Fintech Hub at Gift City, enhancing digital payments and use of AI in governance – all provide a strong platform for Digital India. Allocation of Rs 50,000 crore towards National Research Foundation will work towards boosting India’s Innovation Quotient on the global map and is a welcome move. Allocation of funds as incentives for promoting digital payments is also a step in the right direction and a significant step in ease of doing business. Lastly, increase in allocation for highways and railways will lead to employment generation and boost the economic growth of the nation.

Rajiv Bhalla, MD, Barco India –

The budget is a major step in the right direction. It outlays a strong focus on infrastructure, healthcare, capital spending, disinvestment, monetization, job creation and digitization. These measures are not only progressive and recovery-led, if implemented correctly would ease the burden on the economy and lead India towards the projected v-shaped growth and development. The budget talks about structural reforms in banking, enhancing debt financing and credit limits for businesses and asset monetization. This will lead to an increase in government spending, which, in turn will spur demand, therefore net positive for the industry. The several initiatives around job-creation, startups, reskilling, rural development and better quality of services to people are positive as a Nation cannot progress without care for the environment and inclusive all-round transformation.

Jaya Vaidhyanathan, CEO, BCT Digital

“2021 budget is more of an Infrastructure and Healthcare budget. Glad to see the stimulus to the economy keeping these spends in its core. Governance is also paid attention to. We would have loved to see some more announcements for the BFSI sector over and above the notable mentions like FDI limit being lifted for the insurance sector. And Interesting to see the conversation happening to see the shadow bad bank. While the Stressed assets are being moved to the asset recovery unit, we still have to wait and watch. It does make sense to take the assets to specialist to monetize it, but it also has the inherent risk of the bank just moving the bad assets rather than works on preventing issue of bad loans or prevents NPA’s. So we have to pay attention to its execution. And it is also to be seen who is going to be at the helm of the asset recovery to ensure that execution happens in the right way. There was emphasis on governance issues , and it goes with the turf of independent directors. So overall largely infra and healthcare, things have not been shaken up much, and attention is paid to economic recovery, but it is yet to be seen if this is a V share or U shape recovery. Let us hope the budget is executed well.”

Gaurav Shinh, CEO & Founder, DAAS Labs 

The Budget 2021-22 has left the data science community quite excited for what is to come. For me it was really interesting when the Government announced that it will launch multiple data analytics, AI, ML driven models for e-security, e-education, e- consultation, and compliance management. Also, the prospect of using Artificial Intelligence and Machine Learning in GST Fraud Tracking is quite motivating and intriguing.

The Government’s continued support for the startup is quite uplifting as the Government is setting aside Rs 15,700 crore in FY22 and has reduced margin money requirement from 25% to 15% for startups. The proposal of extending the tax holiday for start-ups by one more year will also give more confidence to the entrepreneurs.

Mr. Kaushlendra Singh Sengar Founder & CEO at INVEST19

“The outset of 1st 2021 decade budget with Indian made tablet has cleared that how much Indian administration is advancing towards ‘Atma Nirbhar Bharat’ and being tech-savvy. No one could deny the fact that the way the administration has opened doors for inviting investment from foreign and institutional investors. The major push to invite investment by eradicating dividend tax on Invites will push institutions to deploy more investments. No introduction of any tax and cess on personal income, start-ups and other areas has cleared that the administration’s focus is more on growth despite the heavy expenditure incurred on Covid-19 in this financial year. Increase in FDI limit in insurance companies, the surge in NRI tax audit limit from 1 crore to 5 crores has cleared that Indian administration is welcoming foreign investment. In order to spur privatization, earlier disinvestment plans of PSUs will be cleared and two more PSUs along with general insurance will be disinvested this year. However, the increase in oil prices, Fiscal deficit target of FY22 to 6.8% and gross borrowings of 12 lakh crores for FY22 will spur inflation that may offset some incentives provided in the budget.”

 Mr Sudhir Kothari, Founder and CEO, Embee Software

“The budget has been extremely fair and balanced in its approach, given the current scenario we welcome the initiatives taken by the government today. one of the key takeaways is the focus on disinvestment however the task is to complete it within the timeline. The push to make the system transparent by bringing offside balance sheet into the government balance sheet is a welcome call and is worth applauding. The big push and focus on Capex expenditure are in the right direction in spite of the fact that the fiscal deficit stands at 9.3% there has been no compromise in the budget by the Government. The great challenge of creating windows for employment will be met by introducing these kinds of steps. The Health Industry has also been given a lot of benefits ensuring that we are not caught unaware if we meet again with a global crisis. The FDI limit increased in the insurance sector will give more options for security and is a major boost for the people of the country. The bad bank and focus on stressed assets is a good idea. One of the best takeaways today is extending residency limit from 120 to 180 days and NRI’s spared with double taxation is a strong message to the International community that the Government acknowledges their contribution in making India a brand. The introduction of competition in the power sector will break the monopoly of the Pvt sector in the distribution of power which will result in commonality in prices and services for the consumers”.

Vivek Raina, CEO & CO-Founder, Excitel

{India lags significantly in terms of Wireline Broadband penetration, with around 2 Crore
connections for a population of 130 Crores, We are at the bottom of the list in terms of per-capita Wireline Broadband connectivity in the world. A 2016 WorldBank study concluded that a 10 percentage point increase in fixed broadband penetration would increase GDP growth by 1.21% in developed economies and 1.38% in developing ones. Therefore Wireline Broadband penetration becomes a very important indicator of Economic growth of a country.So I would expect the budget to have some significant measures to ferment broadband penetration in the country, including tax rationalisation, financial incentives for FTTH roll-outs and easing the regulatory impedances.

Ashwani Rawat & Amarsh Chaturvedi, Co-Founder & Director, Transerve

“The Union Budget 2021 can be rightly considered as path breaking as it was the ground-level of the country and not just sector specific. The budget laid much-needed importance to the country’s healthcare system considering the recent and ongoing Covid pandemic by allocating Rs 64,180 crore for Atmanirbhar Swasthya Yojana, thus strengthening healthcare in India. We also appreciate an outlay of Rs 1.41 lakh for Urban Swachh Bharat 2.0 Mission, Rs 2.87 lakh crore for Jal Jeevan Mission Urban, Rs 1.41 lakh crore for Urban Clean India Mission and announcement of 5 new Smart Cities under PPP mode in collaboration with states, to reinforce the Urban India. Technology being the core suite to build on a successful business ecosystem, we welcome allocation of Rs 8,000 crore for National Mission on Quantum Computing & technology and building data centre parks. The honourable Finance Minister has left no stones unturned to give a boost to new age technology like AI, ML and Data Analytics across sectors with the launch of MCA Version 3.0 which shall target simplification of E-Scrutiny, E-Adjudication and Compliance management.”

 Gaurav Bubna, Co-founder, NextBillion.ai

“We at NextBillion.ai are very excited with the current Union budget for 2021 announced by Hon. Finance Minister Nirmala Sitharaman. The budget fully recognises the impact of startups and how technology plays an important role in the future of digital India and Atmanirbhar Bharat. We think the one-year extension of tax holidays is a great move to support the entrepreneurs. The government is now focusing on many more types of companies especially through incentivising OPC, the government is going all out in supporting small business and entrepreneurship. The budget also touches upon the use of AI and we like how it is used to develop the national language translation project. We think this will be a great step forward in creating India to be a global centre for NLP and associated R&D. Overall really excited to see the effort the government is taking to move India forward-towards a digital society.”

Mr. Vaibhav Patil, Director of Finance, eZee Technosys

 “While the new reforms were widely looked forward to, it doesn’t change the fact that the budget failed to cover infrastructure expansions and innovative setups towards the Digital India movement. The consumers are preferring digital modes now, and the boost was needed for tech companies to take a step further towards digitalization. Let’s hope that the companies are able to make do and innovate with what they have.”

Divanshi Gupta, Founder, Ucanji

“India is evolving to become a startup-friendly country with new and more resolute policies being introduced year-on-year. The FM Nirmala Sitharaman FM has proposed the extension of tax holiday for start-ups by one more year in this year’s historic budget – it will not only improve the state of startups in the country but also encourage them to design & develop innovative solutions that will enhance the lives of people in India (and beyond) while making it an Atmanirbhar country. Pandemic or not, the FM’s approach to encouraging new-age entrepreneurs is a strategic decision towards creating a self-sustainable  ecosystem, and the Indian startup is ready to take on the weight of its people.”

Aditya Malik, CEO & MD, Talentedge

“The Union Budget 2021-22 has proposed some forward-looking measures for the education sector in the country. The proposal to set up 100 new Sainik schools in partnership with NGOs, the private sector and the states will not only expand the school base in this area but will also bring in synergies from the NGO and private sector. The proposal for creating new formal umbrella structures in 9 states will also be good for coordination of states and bringing in synergies. There are also some good proposals for higher education including the registration of Higher Education Commission to act as an umbrella body with 4 separate vehicles for standard-setting, accreditation, regulation and funding. The government has also announced several proposals for scheduled caste and scheduled tribe students which will help bring them into mainstream education. This includes the establishment of 750 Eklavya model schools in tribal areas and the allotment of Rs 35,219 crore for the benefit of these students for the next six years. The outlay for the Eklavya schools has also been increased.

The proposal to strengthen over 15,000 schools qualitatively under the new National Education Policy (NEP) is also the need of the hour especially to align with the vision of the NEP which talks of use of technology and digitization of education. These schools will act as exemplar schools in their regions for mentoring others.

The proposal to amend the Apprentice Act to further enhance apprenticeship opportunities for our youth is forward looking and will help this sector. At the same time, the National Apprenticeship Promotion Scheme of 2016 will be enhanced to provide apprenticeship opportunities for students. The proposal to realign the National Apprenticeship Training Scheme (NATS) will provide post-education apprenticeship, training to graduates and diploma holders in engineering. This will further the government’s initiative for an Atma Nirbhar Bharat.”

Rajat Singhania, Founder of HyLyt by SocioRAC

“The budget is growth-oriented. Govt expenditure on infrastructure is high which will boost the economy. There are no major changes in direct/ indirect taxes. For startups, the tax extension, increase in paid-up capital, registration of one-person firms, NRI permission to incorporate OPCs in India is a good boost to Startups. Overall a positive budget to spur growth, stock markets have responded very positively and we can expect to overcome some of the losses of the year gone by.”

Naman Mukund, Founder, Tekie

“The Union Budget 2021 has proposed aspirational changes that can turn around the education sector. Apart from allocating considerable finance to the educational sector as a whole, an intriguing aspect is the budget’s focus on startups has opened doors for several future unicorns in India. Technology has longed for this demeanor of development where we hope to see India’s youth and especially children choosing it as a career to sharpen their skills. We are eager to see the government’s involvement in bringing more impetus to kids’ Ed-tech sector. The budget’s focus on Tax holiday for startups by 1 year and FDI in the education sector is another progressive reform.”

Mr. Niraj Hutheesing, Founder and Managing Director, Cygnet Infotech

“We welcome the measures announced by the government of India in the Union Budget 2021. Significant capital expenditure in infrastructure and health care sectors will be a big asset for India. Promotion of digitization at large, and digital transactions particularly, is another positive aspect of the budget. There has been political will to take a big deficit for the next year. Simplifying the tax regime is another important aspect of this Budget. To ease compliance, the Finance Minister has increased the tax audit limit from ₹5 crore to ₹10 crores for the companies that conduct most of their business through digital modes. Additionally, the government is also planning to take steps to reduce inverted duty structures in GST and has proposed to review over 400 old exemptions in indirect taxes and will begin extensive consultation from October 2021. The budget also provided impetus on one of the most hard-pressing issues, namely tax evasion cases. The use of digital technologies such as automation solutions and data analytics tools can help in removing anomalies in the GST tax infrastructure and make it transparent to a great extent. All the measures announced today will further enable companies such as Cygnet Infotech to develop technology solutions for businesses to help them adhere to the taxation norms” 

Praveen Paulose, MD and CEO, Celusion Technologies

We wholeheartedly welcome Finance Minister Nirmala Sitharaman’s Budget for 2021 which entails several initiatives to push India’s economic growth in the coming years. The government’s move to allocate Rs 1500 crore to strengthen the digital payments across the country and facilitate a world-class fintech hub in Gujarat International Finance Tec (GIFT) city will boom the fintech sector’s health incredibly. The much-awaited push post-Covid looks to turn in favor of the BFSI and Fintech market. 

Mr. Akhilesh Chopra, Sales Director at Bluei

We appreciate that the government’s focus on encouraging manufacturing in India will boost e-commerce growth in the long run. Mobile, charges, and power banks can be expensive in the coming times. This is because Finance Minister Nirmala Sitharaman has proposed to increase customs duty (import duty) on mobile phones and power bank sub-parts for FY 2021. The aim is to promote local manufacturing in the country, the rebate on all parts of mobile phones and parts of chargers is being withdrawn.

Now 2.5% import duty will be levied some parts of mobile phones and chargers will now be subject to 2.5% customs duty. Till now, there was no duty on these parts. Increasing custom duty will certainly make it expensive for the companies to procure these mobile parts. To make up for this, mobile companies may increase the prices of mobile and power bank in the coming time. The motive behind increasing customs duty is that the government should manufacture these parts in the country. And the pandemic has provided the center an opportunity to attract global manufacturers and make the country a manufacturing hub emerging as an alternative to China.

Currently, handsets attract a customs duty of 22.5%. Apart from this, display panels, printed circuit boards, mechanics, and die-cut parts also attract a duty of 10%. At present, customs duty has to be paid on the components of the total value of 50 percent of the bill of a mobile phone.

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