Union Budget 2017: Reactions from IT sector

Merging rail budget with annual budget is a historic step discontinuing the years of colonial practice #BudgetForBetterIndia pic.twitter.com/RsSJjLsu8X

— M Venkaiah Naidu (@MVenkaiahNaidu) February 1, 2017

With these 3 unique features of Union Budget 2017 has been presented in the house. FM Arun Jaitley has announced a budget to make less cash economy possible. Here read what IT mavens are talking about Union Budget 2017.

What IT leaders thinks On Cyber Security Announcements

FM proposed to form a Computer Emergency Response Team to aid the financial sector. The team will work closely with financial regulators.

Amit Nath, ‎Head of Asia Pacific - Corporate Business at F-Secure said, ''The Union Budget 2017 is at par with our expectations. We welcome the move by the Financial Minister meant to strengthen the digital infrastructure in rural India, by allocating INR 10,000 Cr for Bharat Net Project. The same is slated to empower over 150,000 gram panchayats with high speed internet and Wi-Fi hotspots. While this sets the right impetus for rural India to come online, the government has further taken the steps necessary to ensure optimum level of cybersecurity. We especially appreciate the Computer Emergency Response Team to be setup post the budget announcement and dedicatedly monitor cyber hacks, ensuring the security and integrity of online data. The synergy created by these announcements, along with the efforts of cyber security solutions is going to further inspire new users to come online, aiding India’s transition to a digital economy.''

Pradipto Chakrabarty, Regional Director, CompTIA said, "We already have a Computer Emergency Response Team (Cert-in) which reports to the ministry of electronics and IT. We will have to see how different this team will be from CERT-IN. In my opinion one of the key roles of an ideal Computer Emergency Response Team should be complete focus on threat / vulnerability analytics to prevent security lapses through a team of highly trained professionals on information security defense tactics. Also, it should be a nodal agency for a common repository of breach events so that the entire ecosystem can learn from the best practices. The objective of this team (either new or the existing organization) will be all about analytics and defense. "

Sivarama Krishnan, Leader- Cybersecurity, PwC India- CERT thinks “The thrust on Digital India and digital payments both require a focus on cyber security. The financial CERT and the attention towards cyber security in financial budget is in right direction. The implementation of the initiative will help secure Digital India- Sivarama Krishnan, Leader- Cybersecurity, PwC India”

Vijay Shekhar Sharma, Founder & CEO - Paytm said, "It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Incentives for labour intensive sectors including housing,  farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalisation is great step towards strengthening the financial system of the country. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits."

Telecom sector

Jaideep Ghosh, Partner, KPMG in India
Union Budget aims to boost Digital Economy, which will have a positive impact on the telecom sector. Additional outlay of Rs 10,000 crore for BharatNet and creation of ‘Digi- Gaon’ a definite positive to Broadband penetration; however BharatNet implementation track record needs to significantly improve for benefits to reach rural India. MSIPs benefits for domestic manufacturing of mobile devices & components will strengthen ‘Make in India’ and add to employment. Broadband penetration has a direct impact on economic growth, employment, innovation & prosperity. Strong push on transport connectivity, and healthcare and education through digital media, are likely to have significant long term impact on the telecom ecosystem.

Expressing what he thinks on Bharat  Net announcement, Neel Ratan, Leader- Government and Public Sector, PwC India said, "The Government seems committed to the cause of bridging the digital divide and taking digital to the masses. Allocation of 10,000 crore for Bharat Net and elimination of service charges for railway tickets booked via IRCTC will give a major boost to the mission of making India a digital economy. Additional funds for Bharat Net will further spread the tentacles of optical fiber, which is the backbone of Digital India programme. Aadhaar based smart cards for monitoring the health of senior citizens is a great way to leverage the citizen identity database while marrying technology with health. The move will reduce the burden on our health machinery to some extent and open up avenues to explore more applications of digital citizen identity database".

For Startups FM has announced profit linked-deductions reduction to 3 years out of 7 years. On this Atul Rai, CEO of a Gurgaon-based Artificial Intelligence Startup, Staqu said, "The Union Budget 2017 doesn't provide any direct benefits to startups this year. Besides, the tax exemptions from capital gain are rather difficult to meet, at least in the early stage of 3-5 years for a startup. However, the newly announced exemptions for income tax of common people and well-rounded push towards digital payments will ultimately increase the buying capacity, along with mobile phone utility. These institutional changes, I believe, will push towards the growth of new age digital startups, albeit indirectly."

Sandeep Aggarwal, Founder, ShopClues and Droom quoted, "The Union Budget 2017-2018 is a progressive economy budget. The government has mentioned everything right from reducing fiscal deficit gap to cleaner GDP growth, expansionary nature of monetary policies to reducing the tax for income bracket of Rs 5 lakh.

Profit linked-deductions for start-ups getting reduced to 3 years out of 7 years is a big relief for the startup ecosystem. Until, last year government had given three year tax holiday and MAT (Minimum Alternative Tax) which was going to expire by 2019 and now has been extended to 7 years. However, there are a lot of things I was hoping 2017 Union Budget to touch upon for example policies to ensure that capital is easily accessible to entrepreneurs, repatriation of money coming to India, R&D credit,  no capital gain for any kind of start-up sale or exit and to make foreign listing for any Indian company straightforward.

These pointers should have been addressed. Nevertheless, increasing the tax holiday from 3 years to 7 years is a welcome change and startup friendly.

I hope with the Union Budget 2017, GDP moves in an upward direction this financial year vis-à-vis calendar year 2016 which was negatively affected due to demonetization."

Manavjeet Singh, Founder & CEO Rubique also said that, “We appreciate the announcements made under the Union Budget 2017. We feel the budget is well rounded, covering important cores of the Indian economy, including SMEs, Rural India, Digitalization and the common, middle class citizens of India.

The budget does include certain good news for the startups. The increased period for profit linked deduction for three years out of 7 years as against five years is welcome, as start-ups are not expected to make profits for the first few years. The need was for a 10-year period, but extension to 7 years is nevertheless welcome. The exemption from MAT has however, not been allowed, and an enhanced carry over period will not really help start ups from a cash flow perspective.

Furthermore, the housing and personal finance sector has received a major boost from the announcements by the Financial Minister. The move to shift housing into infrastructure is going to enable debt and equity financing, further bringing down the costs and inspiring users to opt for the same. Besides, the income tax reductions for common people is further going to increase the buying potential or take loans for various purposes.

National housing bank will refinance loans worth Rs 20,000 cr. This is expected to increase Balance transfers especially in affordable housing segment due to strong focus on PMAY. This will also give in impetus to housing sector overall.

Double lending target of banks to Rs 2.44 lakh crore. This is primarily to bridge the existing lending gap & we see more capital available for customers specially for MSMEs."

Satyam Kumar, CEO, Loantap said, "An excellent budget, extremely focused on core that forms Indian economy- rural, agriculture, Sme and middle class.

Direct Tax- straight benefit to salaried middle class, who patiently lined up at banks and ATMs

Housing / Personal Finance - moving affordable housing to infra structure category will facilitate both equity and debt finance at competitive rate to the segment. Will create quality housing stock  and bring in high level technology here.Start Ups will get 7 years under Profit Linked benefits scheme from earlier 5 years. SME up to 50 cr turnover will come at lower corporate tax rate of 25%. Big boost to the segment, which has taken maximum heat.

Presumptive tax at 6% for companies with turnover up to 2 cr is another great step.Overall these measures will lead to greater transparency and broad basing of tax base.As fintech lender: we await FIPB removal and new guideline on FDI norms for smaller NBfCs / Lending institution ."