With the waning of global uncertainties, businesses are redoubling investments in IT as they anticipate revenue growth, but their spending patterns are continually shifting. The wait and watch on how the Union Budget 2020 would Fix India’s Macroeconomic Issues? BJP party members have also urged PM to announce steps to revive real estate and other sectors.
Sources said, “The country is facing a serious economic crisis, adding there was no alternative but to raise spending on infrastructure and welfare schemes to boost consumer demand and create jobs. FM Nirmala Sitharaman, who is expected to deliver the budget speech on 1st February 2020, is widely expected to announce stimulus measures for small businesses and non-banking finance companies as a cut in corporate tax rates and rate cuts by the central bank have failed to revive growth.”
While several expectations are being expressed by industry leaders, professionals as well as students, what the government actually takes into consideration can only be determined next week when the budget is issued. This year 2020-21 budget, FM Sitharaman could announce plans to spend over 105 trillion rupees ($1.48 trillion) on infrastructure in the next five years and expand annual spending on railways, roads, renewable energy, water and health sector by up to 20%. An expert says that we will see measures in the budget to boost investments and growth.
The growing momentum towards open banking models has compelled banks globally to undergo business transformation and expand their service provision to offer broader choices to their consumers, and business customers. It is revealed that while 36% of Financial Institutions are decreasing their branch network while an equal number are transforming them.
Consumer confidence is also a good indicator. The RBI’s latest survey, released in December 2019, shows that the consumer sentiment is at several years’ low – both the sentiment on the current situation and future expectations have plummeted in November 2019.
India’s economy is expected to rebound in 2020 on the back of measures taken by the government and the RBI coupled with easing of global trade tensions.
INDUSTRY EXPECTATIONS
Munira Savai
Country Manager, QAD India
“With the implementation of GST and new policy announced around E-Invoicing, the government has demonstrated that it values technology led governance for transparency and efficiency. Over a period of time, digitization has gained its rightful importance focusing on ease of doing business.
For budget 2020, the government needs to show commitment to support the manufacturing sector by introducing favorable policies and also investing in Infrastructure. Further, incentivizing the use of emerging technologies like 5G, IoT, AI, etc. for the development of a strong and resilient domestic Manufacturing Sector is imperative. Also, in the forthcoming budget, the government can plan to embrace and adopt disruptive technologies to enhance efficient governance with e-citizen services”
CP Gurnani
Managing Director & Chief Executive Officer, Tech Mahindra
“Realizing the dream of India becoming a 5 Trillion Dollar economy by 2025 truly outlines the ‘art of possible’ and depends largely on the choices we make. Digital continues to be the cornerstone of India’s strategy, therefore, sharpening focus on enhancing skills in new age technologies like 5G, improving the quality of education, and nurturing the start-up ecosystem are some key measures that will accelerate India’s IT exports and will help sustain its global competitiveness. As part of the Union Budget 2020, we hope to see focused initiatives by the government that will help India fortify its digital growth momentum and contribute to the global growth story. With 1.3 billion consumers and a large talent base including over 400 million millennials, India can play a key role in scripting a unique success story amidst the global economic slowdown.”
Rajiv Bhalla
Managing Director, Barco India
As the country gears up for the Union Budget on Feb 1, the Indian economy is dealing with several issues including a drop in GDP, liquidity crunch, rising inflation and low tax revenue. While the Centre took multiple measures to boost the slowing economy, some of which have borne fruit, we believe that more steps are needed, especially in promoting growth in rural consumption and labour-intensive segments. Barco remains positive on the India growth opportunity and we look forward to favourable measures from the Centre, predominantly in the technology-enabled sectors and the domains we cater to – medical imaging, smart cities, technological innovation in tourism, among others.
Prashant Solomon
MD, Chintels India and the Hon. Treasurer for CREDAI NCR
“The real estate segment, especially the residential sector, saw some growth in 2019 thanks to the Centre’s strong efforts at improving liquidity and pushing growth. In the new year, we are looking forward to more such measures to boost the segment as the industry still needs various enablers to get out of the rut. We are hoping the Union Budget will announce a one-time roll over or restructuring of existing loans. We are also looking forward to the Centre’s measures aimed at improving liquidity and lowering home loan rates, taxes and stamp duties as these will ensure buying interest from end consumers.”
Dr. Sanjay Gupta
Vice-Chancellor, World University of Design
“With an eye on future, Union Budget 2020 must focus on quality and tax- free education and skill development. If we look at the current scenario, there has been a shift in the nature of jobs and career choices amongst the youth. The budget must incorporate necessary policy revisions required to meet future job demands and to make India as one of the leading higher education destinations in the world.”
Rohit Malik
Founder & CEO, Clicbrics
“Real estate is one of the key drivers of a country’s economy. Policy changes like RERA and Benami Transactions (Prohibition) Amendment Act 2016 have ensured transparency and streamlining the sector. We look forward to concrete measures around liquidity and alternate investment fund to revive consumer and investor sentiment. We also expect the government to focus on lowering of taxes, home loan rates and reduction in stamp duties which will have a positive impact on the sector.” Says
CA Maneet Pal
Partner of I.P. Pasricha & Co
“With GDP at lowest rate in 11 years, Industry expects a lot from this Budget. We believe the government should reduce GST and personal taxation rates to revive domestic consumption in economy. We also believe government might bring Tax dispute settlement scheme to recover pending disputed demands.”
Priya Mahajan
Head of ASPAC Public Policy & Regulatory Counsel, Verizon
“There is great anticipation around the presentation of Union Budget 2020. As Finance Minister Nirmala Sitharaman is set to present the Union budget on February 1, we’re optimistic about the upcoming announcement. We are expecting that the government will initiate some remarkable steps to foster the growth of the Information and Communications Technology industry. A key area where ICT industry is expecting reform is ensuring predictability, consistency and rationalization of levies and taxes including a reduction in the License fee to promote innovation and investments in the sector to achieve PM Modi’s Digital India vision. We hope that the government is considering rationalization of levies and taxes for ICT sector including a reduction of the license fee, which is currently at 8%.”
Akshay Singhal
Founder, Log 9 materials
“I think for startups there are already a lot of initiatives in action, improved mechanisms for execution of those schemes is extremely important. However, I am more concerned about the economy as a whole. To boost economy my suggestion would be to increase spending under Swachh Bharat Scheme may be via MNREGA to get Indian cities clean by employing the bottom of the pyramid.”
Sidhant Lamba
Founder – Fabrento
“Income tax holiday for start up should apply for all start up companies registered beginning April 2015.” “Under GST, the extra GST inputs should be credited back to the startups (like for us, when we buy furniture, we have to pay gst in it, now when we rent, the gst in rent is adjusted against the already paid gst during purchase. But even then, the gst on purchase is much higher compared to what we adjust in rent, so we want that extra gst to be credited back to us.”
Siddharth Jain
Co- founder, Vaahika
“Indian economy needs an urgent dose of consumption booster; thus it would be wonderful to have provisions in the budget which could assist in an instant rise in consumer expenditures. Relaxation on personal income tax rates could be one such move that can act as a booster shot. We expect the budget to bring in provisions for lesser and reduced compliance for smaller companies; which as of today have to follow almost similar compliance that of a larger corporation. We expect this budget to come up with revolutionary steps to overhaul the complete compliance and fillings guidelines for smaller companies and startups and do away with the current penal provisions. The current economic slowdown could be linked with the rapidly declining health of MSME in India; especially the ones in the manufacturing sector. Though the government has already reduced the applicable income tax for this segment; but it appears that it has not been helpful in bringing the required turnaround. More needs to be done to address the concerns of liquidity crunch, ever-increasing compliance and reducing competence for the overseas markets. It has a worse impact on the Logistics sector, especially on the small and medium-sized fleet owners. On one side it is the demand which is declining and on the other side increased operating expenditures have made it very difficult for them to even pay the EMI’s regularly thereby increasing defaults. It is very much expected that the coming budget would have provisions to support not only the survival; but the revival of the logistics sector.”
Amitansu Sathpaty
Managing Director, Best Power Equipments
“There are no incentives, benefits and support for the existing MSMEs in the manufacturing sector. From the budget, we expect that the Government should create a business friendly environment by giving tax credits, free land, worker training, low interest loans, infrastructure improvements and help fast tracking licensing and permitting. The Government should also support in terms of sponsoring our sectors’ exposure to the International markets. The Government’s initiative to promote Make in India can only be possible when the government starts funding which will help us as a sector to represent Indian manufacturers”.
Arun Nathani
CEO & MD – Cybage Software
“The Government of India has taken steps in the right direction to address the economic downturn by slashing the corporate tax rates benefitting the software industry and companies like Cybage. As part of Budget 2020, a combined step taken towards corporate tax and a roll back of DDT across board will bring in FDI and incentivize the industries to ramp up the capex/opex spend once the demand is back. Rationalizing the GST rates and compliance processes will outgrow the consumption rates. The Indian IT industry will welcome specific incentives like weighted deductions for investing in R&D of AI/BI technology tools to facilitate IT companies, Universities and Research Institutes.”
Anjani Kommisetti
Country Manager – India & SAARC, Raritan & Servertech (brands of Legrand)
“2019 has been a year of technological transformation for private sector. However, with digitalization picking up quickly, we have seen an increased rate of cyber crimes. We expect the government to help in combating cyber crimes by introducing stringent regulations to enhance the country’s cybersecurity readiness.
Last year, the government’s focus was more on elections and we saw a low action on IT infrastructure projects. This year we are hopeful to see increased investments that will encourage initiatives to faster achieve the Digital Economy mission by 2030.”
Deepak Mittal
CEO & Co-founder, TO THE NEW
“We eagerly await the Budget 2020 expecting the government to focus on overall economic growth and by taking measures to continue positioning India as the IT epicenter of the world. We expect new policies promoting IT innovations by pushing relevant initiatives, making innovative and bold policy interventions to propel the process of digital adoption across varied sectors.
There’s no denying that Digital innovation is an important building block for India’s future growth. Thus, nurturing new-age tech, improving the quality of talent, and enabling start-ups must be on the agenda of this government. The government can strengthen R&D by providing tax incentives to technology start-ups in the Budget to enable India to draw level with the world.
It is important to note that the amount of data being created and stored across industries continues to grow at unprecedented rates. The government, therefore, must also intervene and play a role in the protection & management of this data.”
Yash Rane
Founder – Chizel
“With Indian economy on slowdown, we need policy with long term sustainable growth and not just for a few years. We are looking at 9% GDP growth and that is not easy. GST has hampered the cash flow of SMBs thereby affecting their buying power. Government should enable monthly filings and quarterly GST payments. Also, it is the time to accept that manufacturing is and has always been the backbone of India.
With China-US relationship getting better, India needs stronger partnerships to bolster exports.”
Dhananjay Sharma
Director & CEO, Log 9 Spill
“Cleantech companies around the country seeks special incentive programmes and larger tax benefits with aggressive government push for innovative cleantech solutions. So that this sector becomes more desirable and stable resulting in more investments in this sector. A conducive environment should be provided to encourage the creation of new cleantech businesses by easing regulatory and compliance policies for such companies.”
Neel Juriasingani
CEO & Co-founder – Datacultr
“We are optimistic that with this Union Budget 2020, the government will come up with some major policy and structural reforms towards strengthening their key programs – Digital India, Startup India. The upcoming budget needs to emphasize the importance of better digital infrastructure by improving internet connectivity in rural areas and establishing centers of excellence for research & training”.
“We are hopeful that the upcoming budget will have policies and recommendations that will further strengthen the ecosystem. We also expect that this time the union budget will push institutions to disburse more funds to tech start-ups that are in the space of financial inclusion and aim to have an impact with disruptive technology at the bottom of the pyramid”.
Suganthi Shivkumar
Managing Director for ASEAN, India, and Korea, Qlik
“The current government’s focus on aspects such as digitisation and data handling is fantastic and the IT industry has great expectations from the Union Budget 2020-21. We hope that the upcoming budget has provisions that can strengthen progressive initiatives such as ‘Make in India’, ‘Digital India’, and the ‘Smart Cities Mission’. Given how data and analytics is enabling organisations to bolster productivity through smarter, more effective work, the government must also look to incentivise data analytics and AI projects as well as introduce technology-friendly policies and better tax structures for the industry.”
“More importantly, it must look to increase the ease of starting-up a company, as it will help in creating more job opportunities for the country’s youth. The IT sector will continue to drive success for businesses across industries with our innovations while also creating new high-value jobs with evolved skillsets, including data literacy. We are hopeful that the budget announcement will help companies in this sector recover from the recent slowdown and optimally realise its growth potential to drive a large-scale transformation within the economy.”
Rakesh Kharwal
Managing Director, India/South Asia & ASEAN, Cyberbit
“The Digital India initiative has done a remarkable job and as Digital India 2.0 gets contemplated, the focus of the government should be to build superior trust in technology. We hope that this Union Budget will focus more on cybersecurity measures to protect the integrity of critical infrastructure for financial systems, public health, science, safety institutions, defense, aerospace, and intelligence agencies. We are anticipating additional budgetary allocation for the national cybersecurity programmers and at least 10% of the technology budget for cybersecurity initiatives.
The government must also add stimulus to the market segment and the economy at large. Perhaps, a good way of doing it can be to include simulation-based cybersecurity training solutions like Cyber Range in the Skill India campaign. It will help in addressing the gap of 1 million professionals in the Indian cybersecurity industry while also aptly positioning the segment for the ripe global market. Apart from that, we expect that the budget will lay down a few more reforms to boost the service provider ecosystem in India.”
Aditya Agarwal
Co-Founder, Wealthy
“All eyes are on the Union Budget 2020. Given the current status of the economy, reviving investments and consumption demand is key to restore the confidence of both the common man and market entities. This would help investments to flow in and provide a much needed boost to the economy.
It would be in the country’s best interest to focus on investment options for big budgets. We are hoping for the government to accord Cat 3 AIFs with a tax pass through status and simplify NRI participation in our financial market via Equity Mutual Funds, Debentures and other market linked instruments. The under penetration of the insurance industry is also an opportunity that can be leveraged. Creating a central repository of insurance policy data through PAN would be beneficial in taking insurance to the nooks and crannies of India where it is required the most. A reduction of GST on Health Insurance would also prove to be a positive enabler in this regard.”
Sudhindra Holla
Director, Axis Communications, India and SAARC
“We are very optimistic with the Government’s renewed focus on smart cities and infrastructure development. The various initiatives like research, education and outreach projects help in addressing the challenges of urbanization and sustainability. We expect that the budget will have opportunities to provide safety to the citizens, especially the women and children and also focus on border security.”
