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Lok Sabha Elections 2024
Lok Sabha Elections 2024 are around the corner, all the political parties are trying to put their best foot forward and promising the general public to provide them with new reforms and a better future. MSMEs, Startups, and the IT industry as a whole are looking forward to these elections.
Whether the next government will provide something new to the table or not, will be seen after the elections. In this article let’s have a look at the key areas which will impact the IT sector the most. Mainly, ease of doing business, taxation policies, GST compliances, boost to MSMEs and Startups in the IT domain, Make in India initiative, and more.
Taxation Policies:
Taxation policies are an important aspect of the economic framework that affects individuals and businesses alike. The new tax regime introduced by the ruling government, which is now the default, offers a higher basic exemption limit and reduced surcharge rates for HNIs.
GST Compliances:
Ever since GST or Goods and Services Tax was introduced it has been debated by the industry. There are several pros and cons associated with this tax. Opposition is promising a GST 2.0, This new version is based on the principle of a single, moderate rate, with a few exceptions.
They have promised to change the current multi-tiered structure into a single one. On the other hand, the current BJP government has also promised to refine the GST policy further.
Ease of Doing Business:
India’s ranking in the Ease of Doing Business index has seen significant improvement over the years, and political parties are keen to continue this momentum. Initiatives like the Business Reforms Action Plan (BRAP) and the Jan Vishwas (Amendment of Provisions) Act, 2023, have been instrumental in reducing compliance burdens and decriminalizing minor offenses.
Parties are likely to focus on further streamlining regulatory processes, enhancing digital infrastructure, and promoting transparency to attract more domestic and foreign investments.
Support for MSMEs and Startups in the IT Industry:
The MSME sector, particularly in the IT industry, is a powerhouse of innovation and employment. The government has taken steps to enhance credit flow to MSMEs, leveraging technology and data-analytics-oriented lending5.
Political parties are promising to continue supporting MSMEs through various schemes, including credit guarantees and technology upgrade funds. There is also a focus on enabling MSMEs to adopt new technologies and integrate into digital supply chains, which is crucial for their growth and competitiveness8.
Make in India and IT Industry:
The ‘Make in India’ initiative has been pivotal in boosting the manufacturing sector, including the IT industry. Intending to make India a global manufacturing hub, political parties are advocating for policies that will attract investment in the IT sector and promote exports9. The focus is on creating an ecosystem that supports innovation, skill development, and entrepreneurship, which are essential for the IT industry’s growth and contribution to the economy1011.
Channel Partners and Associations shared their Concerns:
Meanwhile, DQ channels contacted a few channel partners about their challenges in terms of taxation and ease of doing business. A few senior members of Delhi’s Partner Association shared their concerns with us. According to their statements, large industries are benefitting more from the current policies of the government. Their mergers and acquisitions impact small MSMEs and traders.
Furthermore, they added that compliances are the same for the big names of the industries or a small MSME. There is no difference, big names are resourceful enough to fulfill all the compliances but small-scale OEMs, ISVs, or partners need to deploy a lot of time and resources which is quite concerning. They demanded a single window of tax payable.
Even added that due to the lack of ease of doing business, the new generation is not interested in being a part of the manufacturing or trade industry. They are more comfortable in applying for a job rather than doing business.
Conclusion
The manifestos of various political parties for the Lok Sabha elections in 2024 reflect a commitment to fostering a conducive environment for economic growth, with a particular emphasis on the IT industry.
Taxation reforms, ease of doing business, support for MSMEs and startups, and the ‘Make in India’ initiative are all areas where parties are competing to offer the most beneficial policies for the nation’s progress. But we need to see how it will be implemented and benefit the MSMEs, Startups, or channel partner ecosystem as a whole.