Industry feels it is no big bang budget, but overall it has more positives that address total growth by giving thrust to ‘Make in India’, GST, Gold Bonds, correcting inverted duty structure, Power generation, Education, Road and rail networking, etc. On the flip side, the increase in service tax to 14% is surely seen as a burden, especially on small enterprises and start-ups.
Industry had been waiting for the Budget 2015-16 with great expectations about what the government’s new initiatives like Make in India, Digital India, etc will bring forward. With budget being announced, different industry leaders give their opinions. Industry feels, overall the budget is a growth driver with a few grey spots. Let us read what they are exactly saying.
Mr. Richard Tan, MD & Director, ADATA Technology India Pvt Ltd
Overall the budget looks to be bringing in realignment in taxes for corporates and rationalizing the tax pay-out. One aspect that strongly comes out of this budget is that in the next few months the industrial growth would be more encouraging than at the current moment. The stress toward ‘Make in India’ looks to be gaining and that will surely benefit the local industries. However, raising the service tax is something that is definitely going to pinch the businesses. One significant aspect that looks missing is the increase in income tax exemption limit which eventually would have much higher impact on the growth for industries. However, small benefits like travel can be referred as a breather for the income tax payer. On a rating we could give in a score of 6 out of 10 as though this is not a populist budget throwing in goodies like the earlier budget but clearly focusing on curbing out anomalies and bringing in a spurt in growth.
The biggest focus that the FM has kept is to stimulate the industrial and business growth that had been the main plank for coming to power and more over with no goodies or subsidies announced – it clearly shows government’s strength as a party having an absolute majority. Not coming out with anything substantial for the middle class in the form of any benefits is something that we feel that this budget has missed.
Mr. Sandeep Ladda, India Technology leader, PwC.
The Government has introduced certain key measures such as the place of effective management concept which could be relevant to IT/ITeS companies having outbound operations. With the introduction of GST and improvements in financial infrastructure of the postal network of India, eCommerce companies are likely to get respite. Service tax rates have been increased from 12.36% to 14% impacting Technology sector players. Reduction in withholding tax rate from 25% to 10% on royalty and fees for technical services is likely to encourage Tech startups and facilitate technology transfer to India. With a view to provide fillip to the start ups in technology industry, the Government has set aside USD 165 million to support all aspects of Start Ups, which is a welcome announcement.
Mr. Rajiv Shah, Director, Asia Powercom
This is a bold and far sighted union budget which will help raise the country’s profile as an investment destination. It aims to make many structural changes that will help drive higher corporate investment. Also they include a commitment to simplify and rationalize the various taxation structures that sets a clear roadmap for the next four years. Decent balance of social reforms and growth initiatives have taken which includes ‘Make in India’, GST, Corporate tax and GST implementation which is big news. There was no big bang in budget but collectively budget has addressed total growth package by giving thrust to ‘Make in India’, GST, Gold Bonds, correcting inverted duty structure, Power generation, Education, Road and rail networking, etc. Expectations were running high and there is no doubt that many will feel that this was not the defining moment for the Indian economy that they had anticipated. But overall it was a strong and structured budget with clear roadmaps to achieve the target of more than 7% economic growth in the next 3 years. Only concern with this budget was lack of sops for the middle class people.
Mr. Altaf Halde, Managing Director – South Asia, Kaspersky Lab
Overall the budget is well structured. The announcement regarding bridging the digital divide between the urban and rural India is a welcome move. The announcement of allocating Rs 150 core to create world class IT hub in India under the Atal Innovation Mission is very encouraging. Skill development for youth also got a special mention in the budget. The budget also aims at encouraging the youth to be entrepreneurs rather than simply job seekers. This was followed by the announcement on supporting the startups. For IT sector, this announcement will for sure be a booster.
The rationalization of service tax by including education cess is a good move. The increase will however impact our software sales. The lack of infrastructure development was a concern and it is well addressed in this budget with clear roadmaps and allocation. This will contribute to the overall development of the country. Reduction in corporate tax is also encouraging. The affirmation in the speech of Finance Minister, Mr. Arun Jaitley, addressed the lost confidence among corporate India.
Mr. Dharmesh Anjaria, Executive Director, Dynacons Technologies Limited
This is a very strong and assertive budget. Emphasis has been on tax simplification, tax compliance and infrastructure spend which is the need of the hour. The levies on corporate taxation, rationalization of wealth tax, incentives by more expenditure towards infrastructure are all positives. Clarity on the rollout of GST is a Big positive. This will greatly help in reducing tax complexity and multiplicity. Reduction of MAT rate has been missed out. Also the government is relying too heavily on divestment to meet the fiscal deficit – the deficit target is also quite ambitious. Good aspects of this budget are firm roll out of GST and reduction in the withholding tax which will increase the technology transfer to India. Allocation of Rs 1000 crores to help IT start-ups is also a very good step. Reduction in corporate tax from 30% to 25% over 4 years, reduction of tax on royalty and technical fee as well as re-assurance on retrospective taxation are positive measures. Rationalization of certain duties and taxes would have helped in the build-up to the GST regime. MAT reduction would have been a positive step–-especially in the SEZ companies as this will help give fillip to the exports.
Mr. Sanjeev Sarin, Founder & CEO, Ozone Networks
In my view, the budget reflects a lot of confidence that the new Government has shown since the time it took charge of the office. It also projects a highly positive and optimistic roadmap for companies and investors looking to do business in India, thereby giving a boost of confidence to FDI in India and clearly sending out a signal that it is simpler and lucrative to do business in India. It is a budget for the working class and professionals. It gives a big boost to the farming and manufacturing sectors and also encourages employment opportunities by giving preference and building a strong foundation to domestic manufacturing in India. A very encouraging step forward is the decision to induce investment by 70,000 crore in the infrastructure sector for FY 15-16. Health & Education has been a strong focus in the budget and the Government should be lauded for its decision to provide concession to senior citizens on medical expenses.
Mr. P.G. Lakshminarayan, Vice President-Finance, eScan
The Budget looks pragmatic and realistic and is 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 and let us how it plays out eventually.
Mr. Pankaj Jain, Director, ESET India
Pros of the Budget 2015:
1. The announcement of GST from 01/04/2016 and look forward to its implementation.
2. The increase in the time limit for taking CENVAT credit from 6 months to one year.
3. Streamlining the tax categories as committed, removal of wealth tax is a move towards it.
4. The move towards Central Excise and Service Tax assesses to keep records of invoices in digital form will finally help clean the system of paper and make it greener.
5. The rate of Income-Tax on royalty and fees for technical services reduced from 25% to 10% would help in the inflow of latest technology
6- Opening of the industry in the north eastern state of Arunachal Pradesh for Animation is a welcome step as this will create employment and talent both.
7- Setting up of SETU (Self Employment and Talent Utilization) under NITI with a funding of Rs 1000 crores is a welcome step for the promotion of IT startups.
8- AIM (Atal Innovation Mission) under NITI to help in growth of R&D is good step.
9- Allocation of 1000 crore to startup industries in the IT Sector for the benefit of the entrepreneur who is setting up a new business
Cons of Budget 2015:
1. The increase in Service tax though necessary for the GST implementation has been softened by a lower increase than the expected which would increase again in the next year.
2. Reduction of Corporate tax over the next 4 years is a welcome step but the final impact will be net higher outflow due to rationalization and removal of tax benefits over the coming years.
3. Requirement of PAN for any transaction over 1 Lakh will only increase in documentation for the seller and a step not very welcome there could be other methods to do that.
Mr. Rakesh Dugar, Chairman & Managing Director – Mitashi
Make in India and now ensuring employment to our youth, we have to make India the manufacturing hub of the world is a very good move announced in the budget presented by the Finance Minister Mr Arun Jaitley. Reduction in custom duty on raw materials and intermediaries is good for the sector.
Introduction of GST from the next year and delaying implementation of GAAR are positive for the business in India. The fast paced clearance for starting business in India will attract more investments to the country. The said National Skill Mission, to develop employability of youth below 25 years of age will address the existing gap of trained manpower. Introduction of a comprehensive bankruptcy code for the ease of doing business by 2015-16 is an encouraging one.
Ms. Devita Saraf, CEO and Design Head – Vu Technologies
Government’s Make in India initiative has been initiated to encourage the local manufacturers. But in contrast I believe the budget has been quite disappointing. Presently, the import duty is extremely high. Even we import our TVs. We were hoping for some standard operating procedures whereas the excise duty has been increased on manufacturing. I believe that to support their own initiatives and the country, they should have done much more. Furthermore, we were also hopeful on the digitization aspect. But overall, there hasn’t been much considered to materialize Make in India and Digital India initiatives,” says Ms. Devita Saraf, CEO and Design Head – Vu Technologies.
Mr. Alan D Souza, CEO, Vavia Technologies
The government seems to have spoken of another 1000 cr startup fund with no news about the previous 10000 cr startup fund that was announced during the last year’s budget. Rather than announcing such funds, more focus needs to be given on how utilization of such funds have impacted job creation and then additional support that can be provided for the same. The proposal to reduce taxes for tech startups from 25% to 10% is great news as this will really encourage tech startups in the country.
Mr. Toshendra Sharma, Founder & CEO, Wegilant, SINE IIT Bombay
This is certainly a move in the right direction for fostering a sound startup ecosystem in our country. Any assistance from the government would be a shot in the arm for startups & small businesses. With support towards the ‘self-employment,’ being a start-up, we comprehend the importance of any kind of support and when it comes from our country’s government, we truly wish to deliver the best for the country and make a difference at large! –
Mr. Bikash Barai, CEO – iViZ
A positive move by the government has come at the right time to encourage the Indian startups and entrepreneurs. Today, India is globally the 4th largest in terms of creating startups. Young Indians are highly inspired and motivated to build companies of their own. The initiatives by the government, if implemented properly shall help to accelerate the success of the Indian startup ecosystem and also be one of the leveraging factors for growth of India as an economy.
Plants need additional care before they grow into trees. The government can play a major role in nurturing the young startups before they become big.
Mr. Shivakumar Ganesan, CEO – Exotel
Overall, a very interesting budget from the perspective of startups. The 1000 crore startup fund, the stress on easing permissions for doing business and decision to allow Foreign Investments in AIF are largely reassuring to the entrepreneur community. The fact that the unfair ‘startup tax’ which taxes Angel Investments was not addressed is a little disappointing though.
Healthcare, Education, HR, E- Commerce Clients
Mr. Raju Vanapala, Founder and CEO, LearnSocial.com
This time, the Finance Minister has given special attention to the IT and ITes sector. The announcement of Rs 1000 crore for the promotion of startups is a highly positive move. 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 IT sector. As we all know, a boom in the IT Industry with advanced technology leads to direct growth of the economy. Hence, the government has laid a special focus on this space. The new mechanism known as Self Employment and Talent Utilisation (SETU) will be a techno-financial incubation and facilitation programme to support all aspects of startup business and other self employment activities particularly in technology-driven areas. This too will open more avenues in the sector and be a veritable shot in the arm.
Mr. Amit Bansal, CEO, HealpingDoc.com
The increased healthcare budget allocation is step in the right direction but the amount is still far too less to built an effective and credible public healthcare system in India. The good news is that healthcare has started to get the due attention. The increase in tax exemption limit for health insurance will have significant impact on the penetration of health insurance in the country. This would help corporates to offer a wider range of health packages, and would go further to reduce out-of-pocket health spending.
Mr. Sanjoe Jose, CEO, Talview.com on 1000 cr fund allocation for startups
The budget allocation for startups should be used to promote startups in Tier 2 cities and beyond. This can lead to significant generation of quality employment at par with city counterparts for youngsters in these regions. Areas to be focused should be technology, commerce and education/training.
Mr. Diwakar Chittora, CEO, Intellipaat.com
It is good to see a big step from Modi government towards boosting startups. It indicates very clearly Indian government wants to build healthy environment for startups as in US and Singapore.
If we look at this allocation in detail, there is lack of clarity on how these funds will be allocated, for what duration these funds will be available, what the procedure is to get the funds and what kind of startups are eligible and what is the slab of funding .
There are still some cases where government is doing this work but it’s of no use for many. To give an example, we recently spoke to STPI, Jaipur, where they run a program whose objective is to boost startups under the name of Startup Oasis (http://www.startupoasis.in/) which is a joint venture by RIICO and we approached them for using their facility for our office. They said we are not a startup as our company size is 20 people and they denied providing us their facility. They have a facility with seating capacity of at least 30–40 people lying idle for the last 6-8 months but still they are not interested in giving that to us. Big problem here to address is even though government allocates budget, there is no clarity on how to utilize, who can utilize, who the right authority is to take decision and what the definition of startup is according to the government.
Mr. Ashutosh Modi, Executive Director, EntrancePrime.com
A brilliant, well thought budget for all sections of society and businesses. Measures targeted on black money are very bold and long due. My top picks from the budget – electrification of 20,000 villages, digital India initiative to connect villages with technology, introduction of new IITs, IIMs and other premier institutes of higher learning, ensuring a senior secondary school within 5 kms reach for every child, 1000 crores budget for promoting technology startups, reduction of tax for royalty fees on technology services, initiatives like Nayi Manzil & Pradhanmantri Vidya Laxmi Scheme to promote education & skill development in India, reduction of corporate tax by 5% over 4 years.
However, execution and enforcement plan for influx of larger funds in schemes like MNREGA will be interesting to read. As expected, increase in service tax to make way for GST will be hard on Indians’ pockets. We were expecting a reduction in ROI for education loans, though Pradhanmatri Vidya Laxmi Scheme deals partly with the problem. Looks like an immensely progressive budget going by face value. As an Ed-Tech company, we see some really good opportunities coming out of this budget and we are looking forward to details and execution plan.
Mr. Ramut Sethi, Founder and Chief Mentor, Career Co
FDI would be favorable for us as it will generate job opportunities and help people to find their careers. However, we are not happy with 14% tax on companies. And also, the amount allocated for startups is too less.
Mr. Abhinav Choudhary, Co-Founder, Smartprix.com
Budget 2015-16 may prove to be A Game Changer for tech startups in India. According to Economic Survey 2014-15, Indian Tech startup landscape to be in the mode of generating hyper-growth. In line with the growth, allocation of 1000 crore for startups will definitely be seen as a positive sign from Govt. FM announcement of reducing corporate tax from 30% to 25% in the next 4 years will increase the spending power on marketing and technology of Smartprix.com. An online comparison shopping website and creation of more jobs in the technology sector is expected in the upcoming years. Reduction in the rate of income tax on royalty and fees for technical services from 25% to 10% are welcome moves.
Mr. Rakesh Deshmukh, CEO and Co Founder, Firstouch
I would like to thank Finance Minister Arun Jaitley for the special attention on domestic manufacturing. It is a great budget for mobile phone manufacturing. The reduction in corporate tax from 30% to 25% over a four year period is very appreciable. The move to reduce the burden on younger companies by reduction in the rate on income tax on royalty and fees for technical services to 10% from 25% is very positive. Rs 1000 crore for promotion of startups particularly in the technology sector brings great hope and encouragement for startups like us to develop more patent technology innovations to help promote Make in India initiative. This time budget is for betterment of the entire economy.
Mr. Kenny Ye, MD, UCWeb India
IT’S A BUDGET FOR GROWTH. Budget 2015 is progressive and pragmatic with the right focus on aiding growth and increasing investments. I am glad that the Finance Minister has laid emphasis on ease of doing business in India and cutting down red-tapism. A cut in corporate tax is another big boost for India Inc.
The Finance Minister has promised to allocate 1000 cr for IT start ups and address job creation in the software sector. This is a step in the right direction for inclusive and sustainable growth which will enable innovation and entrepreneurship. There is also the much-needed thrust on higher
education and skill development. The National Skill Development Mission will enhance the employability of rural youth and tap India’s vast potential across social segments. I hope the government firmly embarks on its mission of internet connectivity and digital literacy to aid the next phase of growth.
Mr. Anil Valluri, President, NetApp India & SAARC
The budget from the Finance Minister, Arun Jaitley, is a bold and an assertive one. We are pleased to know that local businesses and budding entrepreneurs stand to make a mark globally through various schemes that will help them prosper. A number of steps have been announced to improve the ease of doing business; creation of Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs. 20,000 crore and credit guarantee corpus of Rs. 3,000 crore are positive steps to encourage young, educated, skilled workers who aspire to become first generation entrepreneurs or expand their activities. With robust growth in the Digital India initiative announced last year, it is heartening to see that the Government wants to further expand it and increase the network connectivity to more rural areas. A progressive and investment-focused budget overall from which we hope to see tremendous growth for the Indian economy.
Mr. Sanjay Kapoor, Chairman, Micromax Informatics
The Union Budget 2015-16 was very critical as it outlines new government’s commitment to reinvigorate the economy, kick-start investment cycle and also maintain fiscal prudence. They have the advantage of a stable political regime and lower inflation, courtesy oil prices! In the light of these two things that I expected from the budget were growth and infrastructure enhancement, including the digital infrastructure like access, backhaul and storage. My first reaction after hearing the budget speech of Finance Minister is that government is making a concerted effort to ‘listen’ to the stakeholders. It’s a sincere approach to problem solving with growth, competitiveness, inclusiveness, realism and long term transformation at the core.
If we reach the forecasted levels of 8%-8.5% GDP growth, we will not only be the fastest growing economy in the world but would be growing discretionary incomes and thus the domestic consumption. Though, there could be some disappointment with the fact that the set targets on curtailing the fiscal deficit will not be met, I guess Finance Minister is being honest & pragmatic here still outlining a very measured, but positive approach for the future.
There is an undoubted focus from our Government on Infrastructure development both physical and digital but the task in hand is very arduous. Allocations are still small and our execution track record as a nation is poor. We will need to really attract global funds & resources to make this happen and the budget is pressing hard on transparency & ease of doing business in India to attract large infrastructure investments. On the digital side, the vision is grandeur but the modus operandi looks flaky. The success will lie in blemish less execution. It will also be an acid test for the PPP approach, which many of us are firm believers of. Policy makers need to be clear that, getting this right is not a project, company or industry issue but an issue about India’s future competitiveness.
As the global standards are going up, investment in National Skills Mission planned to empower youth, and the investment of Rs 15,000 crore schemes to skill rural India is a heartening move.
‘Make in India’ is a great opportunity given India’s disposition to address the supply side economics and create employment. To succeed, we will need a line by line item cost and policy comparison, including IPRs, with competing countries essentially China.
On the taxation front, the trend towards reduction in corporate tax is a positive step while increase in service tax was inevitable given the migration to GST regime. The overall direction of the budget in this regard should not invite any complaints from the industry. The abolition of wealth tax is a welcome move, which is countered by an increase in tax for the super-rich people in the country. This was again an inevitable move as the super-rich must take on the mandate to pay differential tax to maintain the balance. I expected steps towards bringing taxation for rich farmers, so that the tax benefits could actually reach the deserving.
Proposals in the budget to bring positive changes in social welfare, especially pension schemes are encouraging. However, we will have to analyse the fine print of the budget to evaluate the extent of positive change, which will be reflected through these recommendations.
In summary, I see this to be a competitive and growth-oriented budget for which I congratulate our FM. Budget is not just a one day event but a continuous process with clearly defined objectives and predictability. The delivery however is contingent to flawless implementation. Union budget 2015-16 is true to Mr. Jaitley statement, which said, “It is India’s turn to fly.”
Mr. Bhaskar Pramanik, Chairman, Microsoft India
The Finance Minister has presented a broad-based budget focused on accelerating India’s inclusive growth. The Budget reiterates the major programs and initiatives that have been previously announced – Jan Dhan Yojana, Skill India, Swach Bharat, Make in India and Digital India.
The Budget retains the focus on financial inclusion, education, health and agriculture. It has increased focused on infrastructure development, housing and manufacturing in India. Overall, Budget 2015 is wide in its scope and takes into account the interests of diverse sections of society – middle class, farmers, youth, aged and the disabled. It endorses a vision of India where there is a house for every family with 24 hour power, potable water and accessibility by road, and where at least one member of the family is employed–all by 2023, when India celebrates its 75th year of Independence. The FM also talked about building a better social security system for its citizens to provide financial security.
The budget talked about financial discipline, a monetary policy framework with RBI that will keep inflation at less than 6%, but will look at possible double digit growth. The FM is looking at reducing the fiscal deficit to 3% but in three years’ time to release additional investments.
The focus on infrastructure and housing investments is good as it will kick-start the economy and have a ripple effect across all industries. The FM understands the need to kick-start infrastructure projects through increased investments and the need to revitalize PPP with the GOI taking additional risk. The focus on technology as a backbone for government processes and systems is the right approach.
Focusing on startups and MSMEs: The government has recognized the need to support startups and incubators and has acknowledged that a culture of innovation needs to be fostered. Budgetary allocations for incubators, a mechanism for supporting self-employment and talent utilization will allow startups and MSMEs to access the funds and talent, creating new avenues for growth and employment.
Boost to Digital India, Make in India and Skill India: Speedy implementation of the national fiber optic network will enable more rural communities to benefit from the ecosystem of services that can make governance more effective. The trinity of Jan Dhan – Aadhaar – Mobile, the Finance Minister referred to, is indeed positive in a mobile-first, cloud-first India. The Government has also shown its commitment to skill development to equip the nation’s youth to take advantage of economic opportunities. The formation of the National Skill Mission that will consolidate efforts and outcomes and budgetary allocations to financially support youth in their skilling efforts will enable the country to benefit from its demographic dividend. The focus on job creation through the Make in India program and providing gainful employment to India’s youth is commendable and a future oriented outlook. The Finance Minister has focused on the ease of doing business in India. We look forward to policy moves in the coming year that rationalize and streamline approvals for setting up business that can help investments and boost economic development. I am positive about the reaffirmation of the Government’s commitment towards PPP as a key drive of infrastructure creation. This would provide more opportunities for innovation-led companies to partner in India’s growth.
A simpler tax environment: The Finance Minister has provided a firm timeline for the implementation of GST, and this will help companies effectively plan for the next year. Deferring GAAR by two years, and the fact that the government is looking to implement its provisions prospectively from 2017, is also a welcome move. It is an indication of the GOI thinking to make tax less adversarial. The reduction in corporate tax, albeit over the next four years, is certainly welcome, more because it also comes with the reduction of exemptions. Exemptions create confusion. I welcome the simpler framework the Government is proposing. There was a mention of removing SAD on components to remove the duty inversion. This can help local manufacturing of electronic goods as part of the Make for India initiative. The reduction in tax on royalties for technical services will help greater technology adoption in industry and that is welcome.
What was missing?: We must hold the Government accountable for delivering on their budget promises. Many of the announcements made in previous budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented. It is nice to make a mention of the measures for dispute resolution in the speech, but the key is implementation.
We will also need to see if some of the other tax-related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have on driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20%.
Mr. Amar Babu, Managing Director, Lenovo India and President, MAIT
Budget 2015 is a positive and balanced budget that touches upon many areas of infrastructure, universal social security vision, insurance for all and education, among others. From the IT industry perspective, it is a mixed bag with the inverted duty structure being finally addressed by the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2% without CENVAT credit are positive steps to encourage tablet manufacturing in India. However, it disappoints as no initiatives have been taken to increase PC manufacturing and promote exports. In this budget, we might have missed an opportunity to drive ‘Make in India’ in computers segment. We could have improved capacity utilization of existing facility if we had the right enabling structure for local PC manufacturing.
Mr. Soon Kwon, MD, LG India
Overall, the budget is forward-looking, progressive and practical, with a very clear direction for future. It reflects Government’s focus on increasing investment in infrastructure, growth and generating skill-based employment. We welcome the changes in taxation policy, with the reduction in corporate tax over four years and rationalization of custom duty. The determination towards GST and the proposed implementation will boost the industry through the state-of-the-art indirect tax system. Efforts being made by the current government towards achieving its vision of ‘Make in India’ policy are evident in this budget and hopefully it will turn manufacturing in India into a more profitable and business-friendly proposition. Measures to curb black money, job creation through revival of growth and investment will benefit middle class tax payers.
Mr. A.K. Bhuwania, Chairman, VXL Instruments
By looking at this year’s Union Budget, I can say that India’s economy is about to take off on a faster growth trajectory. I feel that overall the budget is positive for all industries — healthcare, automobile, IT and others. It is encouraging to see that the government has reinforced its continuing focus on leveraging technology for development goals. Other announcements like electronic Trade Receivables Discounting System (TReDS) for SMEs, cashless economy, expanding direct benefits through JAM, etc are also a good sign. Furthermore, for technology startups, the FM has acknowledged the need of addressing concerns such as the need for a more liberal system of raising global capital, providing incubation facilities and easing norms for doing business. This budget clearly points that ‘Make in India’ is going to gain momentum this year. Reduction in royalty on technical services from 25% to 10% will encourage technology transfer to India. However, the increase in service tax is something that’s going to bother the industry as it is bound to increase the prices of many tech services.”
Mr. Nigel Eastwood, CEO, New Call Telecom
The Government delivers on its promise of strengthening the infrastructure sector. We, at New Call Telecom, strongly believe that small and medium sized companies hold the key to growth and giving startups a boost will only expedite their growth story. The reduction in corporate tax from 30% to 25% over the next 4 years is a welcome one. The reduction on taxes on technical services from 25% to 10% will also cut down costs for service providers like us who have focused plans for realizing the Digital India dream. Overall the budget looks realistic and a stepping stone to India’s growth story. I second the Finance Minister – India is about to take off.
Mr. Chennapa Naidu Darapaneni, Founder & CEO, MeraEvents.com
The overall mood created by the budget presented by Finance Minister, Arun Jaitley, is positive. Several measures announced like leaving the choice of Provident Fund to employees, the Rs. 1,000 crore allotted to start-ups and many such decisions will have a long-term positive impact on the country’s economy.
However, the fine print of the budget has to be seen for understanding the nitty-gritty of the various decisions announced by the Government. The budget has not done enough for the start-up ecosystem. The Budget has not talked about the Rs. 10,000 crore Venture Capital Fund that it announced in a grandiose manner in the July 2014 Budget.
It is not clear if the Rs. 1,000 crore allotted to enable IT start-ups is part of that Rs. 10,000 crore. The Government’s plan to encourage start-up culture and budding entrepreneurs is not reflected exactly in the budget. The mechanism to support self-employment to support all aspects of start-up businesses should have been outlined more clearly to encourage young entrepreneurs and enthusiasts.
The increase in service tax to 14% is surely a burden, especially on small enterprises and start-ups. Of course, while most of it would be encompassed by the Goods and Services Tax, the Government should have announced some steps to provide relaxation to certain services with a specified threshold limit to ensure that the burden is eased initially.
As it is, the service tax is perceived to be an additional burden and it is transferred to the end-user.
Reduction in corporate tax from 30% to 25% is a welcome decision.
Mr. Karan Mehrotra, Co-founder & CEO, Localbanya.com
1. Goods and Services Tax (GST) – We would’ve preferred implementation of GST sooner than 1st April 2016 to allow a consolidation in tax structures across states, goods and services utilized.
It would also allow for better financial governance by eliminating the need to customize finance structures in different states basis the prevalent VAT structures.
2. Service tax increase to 14% – With timeline for implementation of GST being 1st April 2016, the increase in service tax will impact our margins. This is not a welcome move.
3. Employee Provident Fund contribution by employees being optional – This is good news for our blue collar staff, as it allows for more cash in hand hence translating to better motivation.
4. Self Employment and Talent Utilization (SETU) – The Techno-Financial, Incubation and Facilitation Programme will be an interesting development for us to follow. With an allocation of Rs 1000 crore we are keen to see how this would be implemented. The opportunity lies in improving our technology infrastructure with new businesses attempting to improve processes, platforms and boosting efficiency with technology.
5. Raising the Income Tax exemption to Rs 4.4 lakh would be a welcome development for the semi-skilled staff.
6. Streamlining FDI with composite caps is a good move, however, we expected more clarity on FDI in multibrand retail.
Mr. Gopal Pansari, Director, Savera Marketing Agency Pvt Ltd
We welcome this budget as it is positive, growth-oriented and puts forth realistic roadmap to attain sustainable economic growth. This Budget is a sincere effort to address all classes of society and bringing the economy back on track. Tax exemptions for middle class people, will in turn spur demand for goods and services, which would be a win-win situation for the overall economy of country. There are many positive moves, some big ones and some small ones, in this budget. It is focused on ease of doing business, Make in India, infrastructure, social sectors, etc. Introduction of GST from 1 April 2016 will definitely refresh the industry, make manufacturing more competitive and help common man a lot. Union Budget 2015-16 has been termed as ‘Budget for the Corporates’ by the critics. The middle class and the common man had a lot of expectations from this but they seem to have been left high and dry. Including different initiatives for them could have taken this budget to a higher level.
Distributor’s reactions to budget
MrSubhashGoenka
M/S Goenka Trading
Budget 2015 introduces a strong reform and growth-focused agenda. Clearly, creating a more tax-friendly and investment savvy business environment and managing the deficit more effectively are the top priorities. At the same time, the government has articulated that the tax net needs to be broadened.
Mr Rajesh Kumar
M/S Kalyani Distributor
Budget 2015 is surely a positive signal for export market that will trigger “Make in India” campaign aggressively in near future. Market will certainly grow but it may take time. Current budget will have significant effect on IT manufacturing industry so that overall economy and our Technology center can grow together.
Mr. Rovin Kumar
M/S World Computer
Budget 2015 will definitely help common people to save more and certain relief for tax payers too. The budget will also help IT manufacturing sector to boost up positively. Export market will grow at a good rate and corporate tax has also become lower. Overall it will be helpful for business sector and aamaadmi both.
Mr. Harish Neotia
M/S Nirmala
According to budget 2015, there will be 5 per cent reduction in corporate tax over next 4 years, abolished wealth tax and replaced it with an additional 2 per cent surcharge on super rich individuals, while increasing service tax that will result in higher cost on a variety of services. Government has tried to promote “Make in India” campaign through this budget more effectively.
MrSanjit Kumar
M/S Sanraj Computers
This is an inclusive and balanced budget that seeks to put Indian Economy on a faster growth trajectory. With a plethora of announcements, this government seems all set to take forward the reforms agenda. Also they have taken positive steps for IT manufacturing sectors and overall corporate taxes have also been reduced in current budget.
Sayed Mukheem
One Step IT solutions
The focus on IT manufacturing sector, agriculture, infrastructure, health and education will enhance the social fabric and contribute to equitable growth. Overseas demand for certain products will also grows that leads to more employment options for young generation.Budget 2015 has also addressed some critical issues that were responsible for slow growth rate in India.
Yasir Hitech
Malerkotla
On budget 2015 everyone has a mixedreaction. As far as tax and benefit changes are concerned, benefit cuts have hit low income working age people. Tax increases have hit those on thehighest incomes much the hardest. People on middle and uppermiddle incomes have been remarkably insulated on average from taxand benefit changes.
