Budget 2014 - 15

The inaugural budget of the new NDA regime has been keenly awaited at a time when the country's economy needs a strong fillip to set the momentum for high-growth. Union budget for the year 2014-15 is a welcome move with a more strategic focus, concentrating on mid-long term implications towards sustainable growth. The commitment to achieve 7-8% economic growth in the next 3-4 years anchoring on the core sectors is much needed to revive the sluggish economy. The new government’s budget bodes well for Indian Industry as it encourages local manufacturing, entrepreneurship and transparent governance to create an investor friendly, stable tax regime with retrospective decisions scrutinized by a high level committee.

The government is committed to providing 24/7 power supply. It has also proposed and assigned crores for the development of small smart cities. Urbanization and development of urban infrastructure through smart cities has also found significant mention and over 7000 crore is being allocated for the development of 100 smart cities across the country - this is a huge opportunity for the Indian IT industry to partner with the government in this initiative. The 100 Crore INR provided to enable virtual classrooms through the CLICK initiative is a welcome gesture and the government’s move to establish more IITs and IIMs is great to strengthen the pool of quality technical talent that will enable India’s journey to be a scientific power.

Sunil MK, Head – AEC Autodesk, India & SAARC “Following the presentation of the Union Budget 2014-15 in Parliament, the Government has communicated an aim at higher growth, lower inflation, and a prudent policy stance in the Financial Year 2014-15. The government has considered PPP model as one of the key driving parameters for growth. We welcome the Infrastructure Investment Trust being set up to finance infra projects as we believe this will be crucial in terms of speeding up the completion of pending projects and make way for new ones. The announcement of 100 smart cities is a bold and encouraging step by the government and will open up huge market potential for builders, engineers, architects and companies, who work closely with the building and infrastructure industry in India. Metro rail services to Lucknow and Ahmedabad, national industrial corridor to link cities, development of archaeological sites send out a strong message about the seriousness of this government in pushing for better connectivity and superior facilities for better public life.”

Sanjay Rohatgi, President - Sales, India Symantec “The Finance Minister has presented a forwardlooking budget. ‘Technology for Governance' seems to be the new mantra here. This has instilled a great deal of excitement in the technology sector with an array of opportunities. We are particularly thrilled with the Government’s all-encompassing initiative themed ‘Digital India’ which clearly enunciates a clear action plan for last mile internet connectivity, better access to services, as well as IT skills development of local talent. This is being further reinforced with outstanding proposals for massive investments in greenfield infrastructure projects such as smart cities; youth-focused programs like establishing new IITs and developing a conducive environment for entrepreneurship.

Suresh Pansari- Director Rashi Peripherals Pvt. Ltd. “The abolition of SAD will not have much impact since for traders the same is not available and for manufacturer CENVAT credit was available. However it will improve their cash flow and at times they have unutilized credit available, which will be now taken care. There will be a minor impact to the extent of 3 % of the duty i.e.

0.30 % increase in cost where the duty is 10%. The budget mainly aims to target fiscal reforms with focus on Industrialization, Indigenous Manufacture and Infrastructure development. The direction is positive and we have high hopes that the finance minister will revive the economy and more and more people will buy Desktop/Notebook.

Atal Bihari Bhanja FCA, DITL (ICAI) “IT industry being the growth driver has got several benefits in the first Budget of the Modi Government. Some of them are Advance Rulings provisions covered by domestic tax payers, raising FDI Cap to 49% in Defense and Insurance sectors, Rs. 500 crore fund for E-Kranti and Rs. 100 crore fund for Good Governance in the rural sector, VC Fund in the MSME sector with corpus of Rs. 10,000 crores for start-up companies, exemption of all inputs/components used in the manufacture of personal computers from 4% SAD, Cenvat credit allowed if paid service tax amount only mentioned in the invoice.”

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Ashok Chandak, Chairman India Electronics and Semiconductor Association (IESA) “India Electronics and Semiconductor Association (IESA) welcomes the budget aimed at boosting the Indian Electronics and semiconductor industry. The budget is growth supportive, anti-inflationary as well as committed to fiscal consolidation and reviving growth in manufacturing. We believe the steps outlined for this sector by the Hon’ble Finance Minister and commitment from the industry will put India on the journey of becoming the “Design Led Electronics Manufacturing hub” by attracting investments, promoting entrepreneurship and creation of jobs. The speed and focus of the Minister for Communication & IT and DeitY in capturing industry needs from the electronics sector is very heartening and is a major milestone towards vision of making India an ESDM powerhouse. It is appropriate to say now that, “ELECTRONICS KE LIYE ACHE DIN ANE WALE HAIN.”

Vishal Dhupar, MD, South Asia NVIDIA “We welcome the proposed allocation of INR 7,060 crores by the government for the development of 100 smart cities. The government’s ambition for modernising mid-sized cities will undoubtedly require precision planning and effective disbursement of budgetary funds, and we believe that technology will play a crucial role in enabling this development.

Flawless execution of the Smart Cities vision will require massive computing power to achieve smarter real-time video surveillance, traffic management, emergency response, satellite imagery, seismic modelling, utilities, civic amenities, biometrics and image processing and anti-terror measures. GPU and supercomputing technology can help the Indian government to overcome challenges of costeffectiveness and energy-efficiencies. And, NVIDIA looks forward to supporting the government in its vision of building 100 smart cities.”

Bhaskar Pramanik, Chairman Microsoft India “There were five specific priorities that I was looking for to be addressed in this maiden budget by the new Government - ubiquitous use of technology for inclusive growth, enhancing the education ecosystem, promoting a tax regime that is stable and growth oriented, focus on the start-up ecosystem and greater impetus to the manufacturing sector. It is heartening to note that the budget has provided the right direction on these.

Naveen Aggarwal, Partner-Tax (IT/ITes) KPMG in India “The budget seems directionally very positive, even though it may not have addressed the key expectations for the IT-ITES industry. On the policy front, extension of advance ruling mechanism for resident tax payers and roll-back of APA provisions will be embraced by the industry to provide stability and certainty in an otherwise litigious tax environment.

Debasish Mishra, Senior Director Deloitte India “In the power Distribution segment announcement of Rs 500 crore for “Deen Dayal Upadhyaya Gram Jyoti Yojana” for feeder separation is a good move to improve power supply quality in the rural areas. But the allocation seems to be too little to make any real impact.

Extension of 80IA benefit, (10 year tax holiday) to generation, distribution and transmission of power by till March 2017 is a big positive as it gives the investors certainty. Also as banks to be permitted to raise long term funds for lending to infrastructure sector with minimum regulatory pre-emption such as CRR, SLR and Priority Sector Lending is also positive for power sector.

Anil Valluri, President NetApp Indian & SAARC “It is a well-rounded, directional budget which doesn’t overpromise but tackles important issues. The proposal of a Digital India programme which begins with 500 Crore INR to facilitate pan-India broadband connectivity and eGovernance, encourages indigenous hardware and software entrepreneurship and supports a National Rural Internet and Technology Mission is another big step in the right direction. The strong focus on the SME and start up ecosystem is refreshing. But the highlight of this year’s budget is the focus on use of technology to empower infrastructural projects such Smart Cities.

Kiran Bhagwanani, CEO Dimension Data India “The budget had enough ingredients to stimulate growth in certain sectors of the economy.

Increased focus on leveraging IT for public services will definitely help the domestic IT market in a big way. The major initiatives in this regard are Digital India, one hundred smart cities, national internet and the inter-ministerial e-governance initiative. Focus on reforms to boost investment in infrastructure will definitely have a huge positive impact on the overall market. Another key point in the budget is about skill development that should help us reap the widely anticipated demographic dividend.”

Subhasish Gupta, Country Manager India & SAARC, Allied Telesis “Union 2014 budget is very encouraging as it focusses on infrastructure; IT sectors and hopes to see increase in FDI limit as it would strengthen the Indian rupee. Modi government has outlaid a clear roadmap by allotting Rs 7060 to develop smart cities across India. This would be challenging for the ministers because this is vast, as they have to leverage technology in every part of the cities from core operations to applications. Willing to see new job opportunities in the market and new business in rural areas and hope the government will support Indian economy.”

Jaideep Mehta, VP and GM, IDC South Asia “IDC welcomes the Union Budget as a positive step forward in the government’s efforts to revive the economy and promote economic growth. The emphasis on the infrastructure and manufacturing sectors is particularly welcome as these are foundational for a nation at India’s stage of economic growth. The outlay of Rs. 7060 Crores on Smart Cities will not just push the frontier of urbanisation in India but also create a new set of markets for tech players across the industry spectrum. We estimate a minimum of Rs. 2,000 Crores flowing into the technology sector on the back of this initiative.

The e-governance program to inter-link all ministries and departments is welcomed. New employment and wealth creation opportunities will abound in the start up eco-system with the Rs. 10,000 Crore fund created to boost start ups and SMEs.”

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UNION BUDGET 2014 Salil Parekh - CEO, Application Services Capgemini “The announcements made in Union Budget 2014 are likely to boost growth of the technology sector and also further drive investments. The proposal to integrate all government departments and ministries through an E-platform is a major opportunity for IT players to offer solutions that empower the government to understand the needs of the populace, anticipate them, and to engage better with people.

With this budget, the country is set to witness digital transformation on a massive scale as the finance minister proposes to set aside Rs 7,060 crore to set up 100 smart cities. Additionally with the allocation of Rs 500 crore to set up broadband network in villages and promote local manufacturing of hardware and Indian software products, India continue to a be strategic hub for IT MNCs.”

Koichiro Koide, MD NEC India "We are happy with the Union Budget 2014-15 presented by the new government that focuses on growth and development. The budget depicts the government's effort in promoting the use of new technology and integration of technology across sectors. We welcome government's decisions of allocating Rs. 7,060 crore for development of 100 smart cities and modernization of satellite towns in the country, and an additional allocation of Rs. 3000 crore towards modernization of police departments. This will promote investments in use of modern technology, making our cities smarter and safer. The commitment to develop e-visa facilities at nine airports, and encouraging departments and ministries to be integrated through e-platform by the end of this year further indicates the government's intent to adopt and promote new technology for better governance.”

Deepak Lamba, President Times Centre for Learning “The budget delivered today has set the tone for getting India growth story back on track. The increase in FDI in sectors like Insurance, Defence would kick start the investment cycle. Increased thrust on emerging sectors like e-commerce, healthcare, real estate, etc. would add positivity to business cycle and job creation. Moreover, there has been re-emphasis on education being an area of high priority with announcement of setting up more IIMs, IITs and AIIMs. What gives more credence to the intent of the government is the target for budget deficit at 4.1% for FY15, which would help propel growth in the long term.”

Ravi Swaminathan – MD, AMD India & VP (Sales & Marketing) AMD South Asia “The budget looks very pragmatic and realistic. The government has pledged to support the growth of domestic information technology capabilities in both hardware and software, focused on enabling the timely delivery of citizen services and creating new jobs opportunities, especially in rural areas. The FM talked about Smart Cities and Digital India which clearly speaks about government’s intention to go aggressive in developing the nation by taking help of technology.

It recognizes the role of technology in creating a citizen centric governance framework.”

Subroto Das, Director – South Asia & India WD “As expected, the current government has acknowledged the importance of technology and has demonstrated vigour to promote it for socioeconomic growth. Earmarking Rs 500 crore for broadband connectivity in villages, exempting all inputs/components used for manufacturing personal computers from 4 percent special additional duty (SAD), proposal to develop 100 smart cities, and more such pro-technology initiatives are likely to boost local manufacturing of technology hardware and software. This is important in bringing economic growth, connectivity, and reducing the existing digital divide.”

Edgar Dias, Regional Director, India Brocade “A promising budget with initiatives to enhance connectivity by building infrastructure to bridge the gap between rural and urban India.

The smart cities and digital India programme of the government will ultimately create an economic value for the country by aiming to increase employability and reducing immigration.

Good to see empowerment of the rural areas for businesses to flourish for a speedy economic growth. The measures to boost domestic manufacturing sectors, revive SEZs, support start-ups and set up new industrial clusters are all initiatives towards creating a progressive and advanced India.”

Sunil Khanna, President and MD Emerson Network Power in India “Emerson Network Power believes that this has been a pro-industry budget and the proposal to develop 15000kms of new gas pipelines through PPP will spur growth. Additionally, allocation of funds to create solar power projects across states will help in alleviating the power crisis in the country. Understandably, the focus on implementing the Green Energy Corridor Project will help boost power generation from renewable energy sources. The government’s commitment of providing electricity 24x7 for all households will provide an impetus on maximizing power utilization.”

Dharmesh Panchal, ED (Indirect tax) PwC India “The Union Budget has taken a major step towards certainty in tax legislation by extending Advance Ruling to resident assesses and by providing a forum to address the issues faced by industry. The FM has promised action during the year to resolve various issues for the advent of GST. The Budget has also taken steps to address inverted duty structure for specified sectors, rationalization of duty rates, review of negative list and exemptions for services. Overall, the Budget reiterates the Government’s commitment for tax reforms and clarity in tax legislation.”

Debasis Chatterji, CEO, Netxcell Limited “Overall, a good step forward by FM with a different approach. Certain initiatives taken in this budget by the Govt. are commendable such as - for the first time currency note will be friendly to blinds in India. This budget has a clear map of reducing fiscal deficit. Income tax relief for individual tax payers is a big relief and a tool to tackle inflation. The Govt. has provided a huge boost for personal saving by enhancing PPF from 1 to 1.5 lakh. Initiatives for boosting the manufacturing industry and enabling a good industry network between states will have tremendous impact. In my opinion this was a pro people and pro industry budget with an emphasis on the growth of North East India.”

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BVR Mohan Reddy, Vice-Chairman NASSCOM “Union Finance Minister presented a Good Budget. While there were no anticipated big reforms, the push he gave to infrastructure and housing is very welcoming. The encouragement to startups, entrepreneurship, innovation and incubation is a great initiative and is a high priority area for it will be the engine for employment generation."

Arun Jain, Chairman & MD Polaris Financial Technology Limited “The NDA Government’s Union Budget is reminiscent of Nelson Mandela’s ‘Rainbow Nation’ philosophy, which adopted continuity in the face of volatile relations. The tone of the budget was, in my opinion, smart to wise. The budget signaled to a wide array of segments, with a particular and necessary focus on major infrastructure, as well as relatively low-investment industries. The 15% tax exemption to industries from the Rs. 25 cr range onwards will surely create a conducive environment for startups."

Rajat Jain, Managing Director Xerox India Limited “The maiden budget presented by the new government has been high on intent and has laid out initial steps to kick-start growth, tame inflation, fiscal consolidation, attract foreign capital as well as push through economic reforms. A composite cap of foreign direct investment (FDI) in defense and insurance raised from 26 percent to 49 percent will provide a big relief to the capital-starved private insurance sector and get much needed capital from overseas partners. The requirement of the built up area and capital conditions for FDI is being reduced from 50,000 sq m to 20,000 sq m and from USD 10 million to USD 5 million respectively with a three years post completion lock-in; thereby encouraging development of smart cities.”

Anwar Shipurwala, Executive Director MAIT "The issue on Inverted duty structure by indigenous manufacturers has been taken care of several measures. Special Additional Duty (4%) on all inputs/components used in the manufacture of Personal Computers (laptops/desktops) and tablet computers is being exempted. Duty structure on imported and manufactured computers has been brought at par by withdrawing exemption of CESS (0.3%) on imported computers. The launch of broadband connectivity at village level, with Rs 500 crore allocation is likely to boost penetration and e-governance. The Government has proposed a fund of Rs. 100 crores for setting up virtual classrooms as Communication-Linked Interface for Cultivating Knowledge (CLICK) and online courses."

M P Vijay Kumar, CFO Sify Technologies “For a Government that is just 45 days old, I will say it’s a job well done. This budget has given us visibility on intent and direction. The Government has been very practical in ensuring continuity and making some socially important schemes productive. Secondly, they acknowledge that banks need to be capitalized on priority without which, industry credit needs cannot be met. There is a huge emphasis all through the budget proposals on PPP. Effective governance will result in successful PPP facilitated infrastructure growth. This might also give an impetus to the Smart Cities plan; because eventually these cities would require utilities and connectivity.”

Veerasundar Veluswamy EVP & CFO CSS Corp.

“The introduction of a “Roll Back” provision in the Advanced Pricing Agreement (APA) scheme so that an APA entered into for future transactions is also applicable to international transactions undertaken in previous four years in specified circumstances. This helps reduce long standing litigation affection the IT/ITES industry severely. Introduction of advance ruling for payments made to residents will provide much needed clarity on the taxability of the transaction and avoiding litigation. Continuation of tax rate of 15% on foreign dividends received without any sunset clause will help continue the cash repatriation from foreign arms of India IT/ITES companies.”

Amar Babu, MD Lenovo India “The Modi government’s Budget for the year is positive, encouraging, and includes some much-needed reforms. With a strong focus on infrastructure, connectivity and with the rollout of GST, the FM has given a boost to the economy’s growth momentum, making it easier for businesses to operate. The reduction in Income Tax for the salaried comes as a relief, with a resultant rise in disposable income, encouraging IT purchases. For indigenous manufacturers, the Budget has aptly addressed the issue of inverted duty structure, thus enhancing local manufacturing. Furthermore, with a boost given to e-governance, and the focus on broadband penetration, the Budget has adequately harnessed technology to propel future growth.”

Sanjay Kapoor, Chairman Micromax “Budget is not a one day event; it is a journey to reach Government’s vision for its term. The Finance Minister has made pragmatic choices around available resources and has articulated a road map towards reducing the fiscal deficit and fuelling economic growth. While all of us hope he achieves the ambitious target of containing the fiscal deficit, executing it seems very challenging. His focus on giving fillip to the infrastructure seems exhaustive and he has rightfully protected the common man’s interest in his first budget. While we welcome his stand on retrospective tax policy and intent to finalize GST this year, the current Government has the potential and mandate to take a stronger stance on subsidy and policy."

Altaf Halde MD, Kaspersky Lab -South Asia "The Budget will definitely give a boost to the Information Technology sector with an agenda for promoting Digital India and good governance initiative. Moreover, the focus on Internet connectivity will improve the quality of technology usage in the Indian market and also improve access to services through IT enabled platforms. With increasing Internet penetration, there will be increase in demand for Internet/PC/mobile security. The special focus on supporting new startups to encourage entrepreneurship plus focus on manufacturing sector is a key factor for growth and job creation. Overall, the new Budget will have a steady impact on the Nation's growth."

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UNION BUDGET 2014 Shibu Paul, Regional Sales Director – India, ME and SEA, Array Networks “We appreciate the current developments and congratulate the government's decision to support and allocate funds for Internet connectivity in villages, for development of smart cities across India. The focus on tax rebates for low and middle income bracket and on infrastructure development will boost the growth. This is not sufficient as there is no specific allocation for promoting and implementing eGov projects on a timely manner. Government should concentrate on promoting local manufacturing of IT products and provide specific incentives for IT products and industry.”

G Lakshminarayan, VP -Finance eScan “The Budget looks pragmatic and realistic and was 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 with clear roadmap ahead and it will be quite interesting to track how it plays out eventually.”

Murali Bukkapatnam, President TiE Hyderabad “This budget is one of the most positive budgets for startups and we are delighted to see some very encouraging announcements promoting entrepreneurship in the country.

On one side setting up of Rs. 10,000 crores VC fund will enhance the capital inflow to new startups & SMEs while on the other hand new national accelerators and incubators will boost innovation. It is also encouraging to see that the government is taking steps to spread the seed of entrepreneurship beyond the urban areas by allocating Rs. 100 Crore for Startup Village entrepreneurship for rural population and Rs 14, 389 crore for ‘Skill India’ program.”

Deepak Kumar Sahu, Chief Editor VARINDIA "The strong focus on the SME and start up ecosystem is refreshing. The relaxation of FDI eligibility thresholds aimed at the creation of Smart Cities provides the financial platform for technology-enabled urban regions. The introduction of e-Visas is another example of an entire industry benefiting from the adoption of technology. To sum up, the budget is certainly a first step towards the government’s vision to transform India. The government is committed to providing 24/7 power supply. It has also proposed and assigned crores for the development of small smart cities."

While there is no specific advantages offered in the Union Budget for the IT Distribution and Channel eco-system, TDAI is satisfied that there is an emphasis on consolidation and continuity, which would allow the IT industry as a whole to grow in future. The attempt to bring down cost of components that go into local manufacture of IT hardware would ease the pressure on

manufacturers and is likely to provide a fillip for growth.

TDAI hopes that the government would follow through on its intent to put in place a simple, uniform and transparent GST regime which would act as a single major growth driver and also contribute immensely to ease of business."

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