“This is a pro-industry budget, and the scope for technology companies for automation initiatives has vastly widened because of this”
Mr. S. Durgaprasad, Co-Founder, Director & Chief Executive Officer of Bahwan CyberTek
The Union Budget for 2017-18 has a number of steps that are paving the way in making India a digital economy. With the first step of demonetization taken towards this promise, the budget has further highlighted steps in this direction; for example, Aadhar Pay, is a mandate to digitize all Government receipts and the restriction of cash transactions up to Rs. 3 lacs. This calls for robust technology players in the payments space that can help enable such an environment, in collaboration with the Government.
An interesting point to note here is that the budget has been presented with a fiscal deficit of 3.2%, which is expected, given the current global market scenario. Firstly, it is likely that there will be higher capital outflow from emerging economies like India, since the US Federal Reserve’s intention is to increase policy rates this year; secondly, the uncertainty around commodity prices - especially that of crude oil - is bound to have implications on the fiscal situation of emerging economics; finally, there are signs of withdrawal from the globalization of goods, services and people, as the pressure of protection on the global economy is unsurmountable.
Moreover, some key decisions taken by the Government will work in the favor of IT organizations. For instance, the abolishment of the Foreign Investment Promotion Board and further liberalization of the FDI policy are under consideration – this definitely means further investments in India.
What is definitely reassuring is the amount of measures taken to stimulate growth – Income Tax for companies falling under the MSME category with a turnover of up to 50 crore has been reduced to 25% and the MAT credit carry forward has been increased to 15 years versus 10 years.
Overall, this union budget is people friendly; with widened tax net for corporates and industries, and budget deficit control of 3.2%, this is a pro-industry budget, and the scope for technology companies for automation initiatives has vastly widened because of this.