Budget 2015: What to expect this time?

BANGALORE, INDIA: 2014 changed the dynamics of the politics completely. It changed the parameters of the game and brought in a new paradigm in the digitalized era. Made strong statements of the changing scenario and that the generation today wants nothing but fast radical changes. Not just words but actions which matches words.

The elections which changed the existing scenario of the nation and redefined politics, will now bring the Union budget which will prove if the new regime has done it right and if yes what? A week before the budget is all to be set, lets see the reactions and what the IT industry players have got to say this time..

Partha Iyengar, vice president and head of research - India, Gartner: The biggest expectations for the IT industry will be to put teeth behind the two slogans of ‘Digital India’ and ‘Make in India’. A manufacturing revival in an IT savvy India would be a tremendous multiplier for the Indian IT industry, unlike in China, where manufacturing took off without too much IT support, and China is only now (last 2-3 years) starting to focus on IT as a white-collar productivity effort. This can be a game changer for India in the inevitable India vs China comparisons and a huge boost for Indian competitiveness on the global landscape. Similarly, the ‘Digital India’ initiative has huge ramifications for the Indian IT industry and Indian industry overall as well. It will (hopefully) been better access to the vast areas of untapped rural India, which can drive unprecedented economic growth across industry, by allowing companies across all industries to tap the elusive ‘bottom of the pyramid’ economic opportunity. Country level infrastructure improvements needed to drive ‘Digital India’ will also help spur industries embrace of the digital business paradigm, which will increasingly be a competitive imperative in the coming decade, as digital business hastens the demise of ‘geographical reach’ as a competitive barrier.

In order to achieve the above, the government needs to focus on the following, in order of priority:

- Time bound execution of all initiatives - This has been the governments Achilles heel forever! Even when the funds are available, the inability to get anything done in a reasonable time-frame has been the biggest barrier faced by Indian
industry.- Improving the FDI climate

- To truly achieve the promise of these two initiatives (and assuming point #1 above is addressed), massive FDI will be required to support the infrastructure revamp. This will involve streamlining policies, accelerating reforms including (especially) tax reform amongst others.

- Education system & Human Capital -  The education system needs a major revamp to move the next generation of students away from the ‘do as you are told’ mindset to one in which they are encouraged to ‘think for themselves’. We have hidden for too long behind the fig leaf of Indian culture and the ‘respect for authority’ which drives the ‘do as you are told’ mindset. It is time – indeed it is critical – that we move on from that outdated thinking and teach our students to challenge what they don’t understand or agree with.

While Gartner suggests these points as critical, MAIT on the other hand recommends different four points:

1. Eliminate inverted duty structure by existing SAD exemption to all goods(including inputs, components and accessories as well their parts and sub parts) when imported for use in the manufacture of ICT Hardware products across the value
chain.

2. Remove tariff and duty anomalies by introducing 1% excise duty without CENVAT(currently available to mobile phones only) to all ICT products across the value chain.

3. Provide impetus to ICT hardware exports by extending export incentives under the Focus Product Scheme(FPS) and Focus Markets Scheme(FMS) to domestic ICT hardware companies for 5 years.

4. Develop an efficient manufacturing ecosystem by creating a “just in time” Component Delivery System.In addition, MAIT strongly recommend the creation of a Task Force consisting of Government and functionaries from domestic ICT hardware companies to draw a roadmap to achieve full capacity utilisation in existing manufacturing facilities and build a robust ecosystem.

Now these are the reactions which the players gives while the bigger players still remain to be silent.

Anil Valluri, president, NetApp India & SAARC, said: "To transform the lives of people by making them digital, the Union Budget 2015-16 should address the technology need of the hour. I’m sure that the budget will focus on providing investments in areas such as India’s technology infrastructure. A substantial amount needs to be earmarked to develop a robust network infrastructure across the country, which will be the foundation on which India’s digital economy will be built. We also expect reduction in taxation for IT players, who will be key in realizing this network infrastructure. The government is taking up the ‘Make in India’ initiative in a big way. While this is a great initiative, the budget needs to address the issues of simplifying the tax regulations, improve ease of doing business and accelerate the speed of big ticket reforms on the anvil."

Ravi Swaminathan – managing director, AMD India & corporate vice president, AMD South, commented: " With this budget, we look forward to India becoming a centre of excellence for product development and design and also being integrated into the global supply chain with manufacture of key components for both domestic and international markets.Talking about the industry at a whole, we believe affordable broadband, radical government process re-engineering and the use of IT in all government processes will be the biggest enablers."

Blue Coat Systems' Ambarish Deshpande, managing director- India also shares his views. “The Government should focus on information security sector for long-term growth and development of organizations across the country. The rapid growth of cybercrime has created a dent in various companies due to their under-preparedness and this has led to a growing demand of information security professionals across these organizations. Our workforce lack information and specialized courses that can bridge this gap. I foresee this imminent need being addressed with the upcoming budget. Information security is a critical issue and an increased awareness about the same from an educational  perspective is the need of the hour. I also believe that procurement of Internet Security technology should be planned at initial stages of a project rather than setting up the complete infrastructure and then thinking of securing it later. This leads to gaps in completed projects and makes it vulnerable to use.”

With all the different angles to look at, it will be quite interesting to see what changes the Government brings and which expectations are met this time.