All eyes in the country are on the Union Budget 2017, which will be announced on February 1, Wednesday. Post the demonetisation exercise, this will be a chance for the government to take stock, and set the terms for the future. Businesses will be looking at Budget 2017 for breaks to help offset any upset during the last few months, while the rest of us look for changes in duties and other taxes, to see if the items we buy are going to become more expensive or cheaper.
Regarding Budget 2017 expectations, Ram Gaddipati, CTO and co-founder of reimbursements platform Zeta, not surprisingly believes that the government should reduce taxes and charges on digital transactions, and further provide incentives for the next several years, until digital payments become "the dominant way of transactions."
"Tax incentives should be provided to people who use digital payment options," Gaddipati adds. Others also have their Budget 2017 wishlists centered around their individual businesses - for example, auto-aggregator Jugnoo's CEO and founder Samar Singla says bike taxis should be defined under 'Negative list' from service tax perspective, and that startups in Budget 2017 should be exempt from paying income tax for ten years, rather than the three currently.
The Budget 2017 wishlist for Shailaz Nag, COO, PayU India (a leading payment gateway) is that the government should spend money to teach people how to make and receive digital payments. "My only expectation from the Union Budget 2017 is the availability of enough funds dedicated to imparting and increasing knowledge and creating awareness amongst Indian users, both merchants and consumers, on how to pay and accept payments digitally," he says. Symantec, meanwhile, is recommending that 8 percent of the overall IT budget be specifically for cyber security with Budget 2017.
Similarly, in its Budget 2017 wishlist, MobiKwik says the government must reduce corporate tax for startups and companies promoting digital payments. It adds that there should be a reduction in income tax for individuals and companies promoting secure digital payments. And also that Budget 2017 should announce sops for fin-tech companies providing data protection.
Apart from asking for sops, plenty of people also had thoughts about the GST. "The Finance Department should give a firm date on implementation of GST and the burden of compliance with regards to GST should be kept minimal," says Jugnoo's Singla. Online apparel store Kraftly's CEO and founder Saahil Goel agreed, saying the government should implement GST as soon as possible, to make e-commerce convenient. "Right now, the State and Central tax make running a business cumbersome," he says. "Once GST comes into the picture, selling online would be much easier."
"The Government should positively aim to introduce the much awaited and hyped GST at the earliest," says Peter Chang, Region Head South Asia, and Country Manager for Asus India. "With its impending implementation, the upcoming budget should not only detail out steps for its successful rollout, but also give clarity on custom duty/ excise duty on mobiles post GST roll out."
"Additionally, to carry forward the Prime Minister’s vision of ‘Digital India’, the government should consider special incentives and taxation benefits on the entry consumer PC segment, especially for below Rs. 20,000," he adds, saying, "Thanks to the ‘Make In India’ campaign, we have already seen major global smart phone manufacturers set up base in India. The government can now further work upon directionally establishing and strengthening the component ecosystem in India to further enhance manufacturing value chain in India."
Bala Parthasarthy, CEO and co-founder at MoneyTap - a money lending app - talks about the importance of UPI, and says that the government needs to evangelise UPI. “A serious publicity campaign needs to go behind education people,” he says. “Make all (central) government services accept UPI within the next 90 days. The challenge right now is that there are not enough acceptors of UPI.”
He also adds that the government should leave innovation to entrepreneurs. “BHIM app is better than most private bank apps, but banks are not exactly innovators,” he says. “Innovation and adoption can only come if the million entrepreneurs in the country can develop UPI apps, which today they cannot.”
For many, the Budget 2017 forecast is accompanied with a certain degree of optimism. For example, Sanjeev Bhatia, the CEO of Zopo India and Managing Director of Adcom (whose phones were used as "prototype" Freedom 251 handsets) says the electronics and telecom industry's Budget 2017 predictions are quite optimistic, and will be expecting some stimulus post demonetisation impact.
"Also, as GST is on the move, we are looking forward to its implementation for smooth and simplified taxation procedures which will boost manufacturing industry and will benefit all," he says.
“Modi-led government transformed the Indian industry outlook by initiating multiple programs," says Rakesh Deshmukh, co-founder and CEO Indus OS. "Today, Make In India, Digital India, Standup India and Startup India programs not only enrich entrepreneurial dreams but also provide financial aid for making it viable to create long term sustainable impact. We expect focus on these programs to be maintained in this budget as well for positive investor sentiments and overall long term growth."
"Upcoming budget should address and encourage alternative ways for payments especially cashless transactions and offer additional benefits on digital payments," says Akshay Dhoot, Head, Technology and Innovation, Videocon. "Further, we expect differential duty on mobiles to continue as it has helped the Make in India. Videocon believes that the government will announce a budget that will favor local manufacturing and support Government’s Make in India and Startup India campaigns."
Debjani Ghosh, Vice President, Sales and Marketing Group and Managing Director for South Asia at Intel expressed some dissatisfaction, saying that while the initiatives around adoption of technology have been steps in the right direction, expected benefits of government programs have not been effective.
"For instance, in the area of skill building, which is a significant focus area of the PM, access to mobile phones, largely a consumption device, has been made easier, whereas the same incentives have not been extended to the other screen devices that actually enable skill building," said Ghosh. "As recommended by MAIT, the extension of concessional Excise and Customs Duty benefits should be extended to all ITA goods, including locally manufactured devices such as laptops and PCs will not only trigger innovations in design and manufacturing to address local needs, but also enable citizens to create productive content."
"Similarly, while there has been significant focus on ease of starting of a new venture and related support, the areas where significant hurdles still remain for startups and established companies are the regulations around latest technologies such as 5G, autonomous driving and drone deployment," she added. "Today, it takes a little less than one year for large companies to source an experimental license from DoT to work on new emerging communication technologies, so imagine the plight of startups."
"The hard truth is that we are running out of time, and the government has to look at implementing policies that are not just great ideas but also have great impact – whether it’s for boosting local research and development in the country, or for unifying the country through standard GST," she said. "Finally, while manufacturing is encouraged under Make in India, we should also look at encouraging Electronics Design through incentives, driven by public private partnerships.”