The past year has seen an upswing in business sentiment in India, and industry is looking forward to a budget that will support the Government’s agenda for expansive growth. Circumstances are conducive to comprehensive reforms –global oil prices are at a low, inflation is under control, and albeit minor, India’s current account deficit is in a surplus. This is the appropriate backdrop to give the Finance Minister a degree of comfort in pursuing a bold agenda.
Overall, through the budget, I look forward to the Government re-invigorating the investment and growth cycle in the country by streamlining procedures that will make India an easier place to do business. Announcements in the budget, and key policy decisions and legislations on labour laws, land acquisition as well as increased FDI across sectors can provide the economy with a much needed shot in the arm.
The use of technology is going to underpin much of India’s efforts in rapidly growing the economy, and the ICT sector could do with some measure of support from the Government to be able to contribute more effectively to the country’s growth story.
Simplify Government procurement processes
Government procurement processes currently discourage the participation of SMEs and start-ups since they are based on size, experience and track record. The Government can help innovation-driven companies to leverage the domestic market by revising and simplifying procurement processes.
Address regulatory and tax issues for the software industry
A complex system of regulation and taxation has proven to be a source of discouragement for investors. Consequently, startups and SMEs face difficulties in accessing funding. Streamlining these issues can enable industry and innovation driven companies to expand and prosper, driving growth. In addition, resolving ambiguities in taxation of software products and services can make it more affordable for users.
Provide clarity on key policies around transfer pricing, royalty
The technology sector in India has faced hurdles on some key issues that reduce industry’s capacity to take long term business decisions. Clarity on transfer pricing rules can give investment a boost and increase investor confidence. In addition, aligning definitions of royalty with international practices will provide a fillip to the software sector in the country and bring India in convergence with global norms.
Incentivize use of technology by industry and Government
IT plays a major role in increasing efficiency, sustainability and competitiveness of industry across sectors. Incentives should therefore be given to industry for adoption and implementation of IT tools. Incentives for R&D, and in the form of deductions for skill development and employment will also support growth and viability of startups and SMEs.
Encourage e-commerce and online transactions
Online transactions give the Government a key tool in enhancing financial transparency. E-commerce and digital transactions should be encouraged by bringing taxation on transactions atleast on par with those in the physical world. This would incentivize industry, both enterprise and retail, to migrate to digital platforms. Furthermore, clarity on goods and services tax as well as a firm timeline for roll out will enable industry take it into account during their financial planning.
Drive digital inclusion through mobile
In a mobile-first, cloud-first India, mobile devices are going to play a key role in fuelling inclusive growth. The delivery of Government services over mobile can dramatically change the way Indians interact with Government. Lowering excise duty rates on smartphones will encourage their adoption, and help drive the creation of an ecosystem of services for the benefit of the citizens.
Lay a technology driven foundation for flagship initiatives
The Government has demonstrated its progressive outlook and commitment towards the use of technology in governance and development, both social and economic. Initiatives such as Digital India, Skill India and Make in India represent a great opportunity for technology to play a key role, and offer significant potential for industry to collaborate with the Government. Inclusive growth, powered by technology in a mobile-first, cloud-first world, can empower our population. We look forward to announcements in the Union Budget that will enable people and businesses in India to do more and achieve more to meet their fullest potential.