India Inc's Expectations From Union Budget 2013-14

India Inc. shares its expectations and wishlist from the Union Budget 2013-14, specially from the IT point-of-view:

H. V. Raghuram, MD, Karnataka Udyod Mitra (A Govt. Of Karnataka Org.):

Since the IT services in government machinery seem quite sluggish, for example, important websites like IRCTC going down at peak times, I expect rise in IT expenditure from government. Also, more funds should be allocated towards improving the quality of existing IT infrastructure. This will create a lot of opportunity for various service oriented companies.

Subramanya C, Executive VP and Global Technology Officer, Hinduja Global Solutions:

The government needs to relax the SEZ norms in order to enable companies utilise the potential benefits of SEZs. I support the NASSCOM recommendation to eliminate MAT (Minimum Alternate Tax) or bring down the rate MAT to 1/3rd of the corporate tax rates.

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Satish Gidugu, CTO, RedBus.in:

The Government should look into the aspects where small and medium enterprises can benefit. A large chunk of small and medium enterprises today are operating in the online space, i.e., e-commerce businesses which are not booming in India as they should have, tax benefits for such businesses will be a welcome step.

Sudhir Kumar Reddy, CIO, Mindtree:

We are expecting a balanced budget, so the fiscal deficit doesn’t climb. There shouldn’t be any additional tax imposition on the section of population which are already paying tax. The SMBs should be encouraged with benefits as they are the future source of huge employment.

Jagdish Mahapatra, Managing Director- India and SAARC, McAfee:

Over time, the Indian government has adequately provided concessions and provisions to the IT services and products industry owing to its significance from India’s GDP standpoint. As a company leading the charge in the Indian security technology industry, following are our key expectations from the Union Budget 2013-2014-

We would like to get some clarity around treating software as goods (subject to VAT) or as service (and subject to service tax).

We hope the Minimum Alternate Tax levied on SEZs, severely affecting foreign investments in India is discontinued or reduced drastically. This would lend strategic benefits and ensure continued thrust on investments from companies with a long term focus on India.

The last year’s budget witnessed the Finance Minister’s support to roll-out UID in 50 districts: This will act as a catalytic force that will not only enable financial inclusion, but also help the rural populous in gaining identity and for the daily wage workers. We would also like to take this opportunity in assuring our support to the government’s UID project and assistance required in the security requirements for the program.

Also as India has witnessed sophisticated cybercrime cases affecting both enterprises and consumers, it has become increasingly important for us to have an evolved security system in place. Entities such as CERT have been playing a pivotal role in enhancing the security of India’s Communications and Information Infrastructure through proactive action and user awareness, we would expect the Union Budget to apportion more grants to ensure secure data access for all Indians.

Partha Iyengar, Country Manager - Research, India for Gartner:

The IT industry has reached a tipping point in terms of scale and maturity today, where the issues it is grappling with as the next impediment to growth do not have to do with granular industry level issues like taxation, ‘sops’ etc. The issues that will enable or inhibit the next level of growth for the industry have to do with fundamental country level issues like infrastructure improvements, education, skills development, streamlined regulatory procedures and improving the investment climate. Therefore I would look at increased focus on budget allocations or clarity of future direction of the government on these macro issues as indicators for the future success of the IT industry.

Kailash Katkar, MD and Chief Executive Officer, Quick Heal Technologies:

To my opinion, the Union Budget for 2012-13 should incorporate policies and measures to develop the domestic software industry and also focus on encouraging software products segment in the country by protecting it from foreign competition in the domestic market. The Government should promote Indian software products to develop more Intellectual property for India. The current ecosystem is designed to take care only of service providers and we are losing out on benefits which can accrue from a vibrant product development industry in the software domain.

Right now the lack of a strong framework in protecting software intellectual property is damaging the overall reputation of the Indian IT industry across the globe. During the tenure of Late Rajiv Gandhi’s prime ministership a lot of new initiatives were introduced in the software industry. This was done to encourage software services and it propelled the domestic productivity. The situation is a lot worse today. India has now been ranked among the worst and awarded lowest scores for copyrights, patents and other intellectual property by the U.S. Chamber of Commerce. Currently, there is a lack of stringent policies and the government perhaps is overlooking the connection between software exports and Indian software products. India is losing out on the competitive edge because of this situation. A lot can be done to develop an ecosystem in providing strong Indian software products and intellectual property protection. This will not only fortify the Indian software industry but will also create more patents, Trade Mark, Intellectual property and copyrights and increase tax revenues.

Kedar Sabne, Financial Controller, Cybage Software Pvt. Ltd.:

Announcing implementation dates for the DTC and GST will allow industry to do a better decision making and proactive planning. As for Forex earners, redefine STPI schemes with minimum incentives to promote entrepreneurship and generate employment, the percent of MAT on SEZ can be revisited. Young IT talent needs to be rewarded for being TDS compliant through exemption. Also effective implementation of new IT systems will simplify procedural delays and improve tax base. Negative list is a right step towards tax simplification, expect more clarity.

Arunn K Asthaana, MD & CEO, VVIDIA Communication:

We expect the Budget 2013-14 to take steps to increase broadband penetration. One of the way of increasing penetration is by making it affordable to the end-user especially on mobile. Internet, like telecom services, attracts 12 per cent service tax is acting as a deterrent. Abolishing service tax on mobile internet/broadband services in Budget 2013-14 would make it affordable and boost penetration as well as help in empowerment of users through knowledge and information in non metro as well as rural India.

We will appreciate if the service tax is abolished on telecom Value-Added Services (VAS) and it should be treated as supply of service.

We expect the union budget to create a world-class start-up ecosystem by 2015. The start-up ecosystem is must for driving innovation and growth in the country. VVIDIA Communication expects Budget 2013-14 to focus on setting up industry-ready incubators, expansion of incentives for private incubators, funding support and incentives for entrepreneurs to set up a venture would provide the necessary thrust to the ecosystem.

The budget should also provide some specific incentive to MNCs/ large enterprises to collaborate with start ups and young companies in early growth stage to develop core intellectual property. Further, we at VVIDIA like the Budget 2013-14 to provide for an income tax-exempted venture funds to fund young companies in early growth stage. The country needs to replicate institutional mechanisms to bootstrap growth in start-ups and young companies, similar to what the STPI scheme did for the services companies in the 90s.

With inputs from Robin Chatterjee.