Expectations from the Union Budget 2016-17 – Bhaskar Pramanik, Chairman, Microsoft India
We have much to celebrate in what the country has achieved in the last one year. The Government of India has ably implemented the contours of the country’s growth framework through its all-encompassing vision to boost digital inclusion, local manufacturing, and entrepreneurial spirit. As we step into the new fiscal year, I am looking forward to the Government presenting a growth oriented budget that addresses gaps and sets a clear way forward to ensure that the optimism is not short-lived.
Create the right environment to boost India’s start-up ecosystem
We laud Prime Minister Narendra Modi’s ‘Start-up India’ initiative and believe it can boost the momentum of entrepreneurship that has already begun. Exemption from income tax and self-regulation for three years, exit procedures made simpler and faster are good developments that can help start-ups focus on innovative, future-oriented solutions.
Make technology access a reality
The Government of India’s vision of Digital India can be best achieved in collaboration with the industry. Number of companies have come forward with innovative offerings to overcome the hurdles posed by the country’s diverse geographical terrain to provide Internet and mobile connectivity in the remotest corners of the country. I would like to reiterate that innovative solutions such as TV White Space technology can be the affordable answer to last mile connectivity challenges in the country. We look to the government for a technology-agnostic approach and a policy framework that can make it possible.
Provide a boost to technology adoption for citizen services
To propel India’s digital transformation, we hope for policy reforms that can create a conducive environment for the private sector to contribute ever more significantly to India’s growth journey, through technology innovations and public private partnerships. While the government is clearly very sincere about embracing cloud technology, there is a need to strengthen the understanding of how public cloud infrastructure can be adopted to support the country’s digital goals, while offering the highest levels of scalability, flexibility, data privacy and security – a need of the hour in today’s mobile-first, cloud-first world. To successfully deliver a Digital India, cloud infrastructure can offer limitless computing power to make verifiable, digital identity a reality. This can in turn open up endless possibilities for seamless delivery of all government services across e-governance, financial inclusion, healthcare and education.
We also look forward to newer frameworks that will rationalize and streamline approvals for setting up businesses, such as single window clearances. This will directly translate into higher investments and economic development, further aiding the Make in India vision.
Address regulatory and tax issues for the software industry
We maintain our stance on addressing regulatory and tax issues for the software industry. Resolving ambiguities in taxation of software products and services and clearer guidelines on transfer pricing will give impetus to the growth of the industry. Implementation of the APA will provide the much needed assurances to multinational companies and boost investments in India.
In addition, a complex system of regulation and taxation has proven to be a source of discouragement for investors. Consequently, start-ups and SMEs face difficulties in accessing funding. Streamlining these issues can enable innovation-driven companies to expand and prosper, driving growth for the economy.
The industry’s concerns with regard to double taxation on software products have been debated time and again. The absence of smooth credit flow embeds taxes and increases costs of companies and products. Concrete timelines on the implementation of GST will be very beneficial for the industry. And, while GST will simplify levy and valuation on composite transactions by eliminating multiplicity of taxes like VAT, service tax and entry tax, it is important for the government to set clear and specific proxies to determine the place of taxation of services that involve assets and people across different states coming together to service customers in a third state. This is even more important for IT service companies and cloud service providers.
A skilled India
Increasing capacity and capability of the existing system is key to achieving the target of skilling 500 million people by 2022, as laid out by the government. There is an urgent need to implement skill development programs on a large scale to create employability and entrepreneurship. This will provide more opportunities for innovation-led companies to capitalize on India’s demographic dividend and create a large pool of skilled workforce – key to support growth across sectors and the economy, at large.
We look forward to a budget that can help consolidate the growth agenda set by the government and strengthen the socio-economic indicators that spell progress for the nation.