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Industry bodies from IT not too unhappy with the Budget

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Abhigna
New Update

NEW DELHI, INDIA: Industry is replete with mixed reactions on the Budget announced yesterday. A look at how key industry bodies are responding to some highlights, says a lot.

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For instance, NASSCOM has welcomed the focus on the ICT sector in the Union Budget proposals 2014-15 and termed it as a pragmatic and directional budget. As R. Chandrashekhar, President, NASSCOM said, "The announcements on a pan India digital initiative, funding for start-ups, district level incubator network and leveraging technology for good governance are welcome steps. These measures along with the initiatives on skilling, smart cities and ease of business, reflect the thrust on role of technology in Budget 2014".

NASSCOM and the industry thanked the government for addressing many key concerns raised by it on transfer pricing issues. The APA rollback, usage of multi-year data for benchmarking and other announcements should help to improve the business environment in the country. The budget proposal on proactively brining a closure to the retrospective tax issue and setting-up a high-level CBDT committee should address industry concerns. There remain certain areas of concern, which could perhaps be addressed through subsequent guidelines and/or clarifications such as those related to royalty definition, Place of Provision of Service Rules, etc.

iSPIRT also congratulated the Union Finance Minister on a thoughtful maiden budget. It views that the budget has established the Government's special focus on the Software Product Industry (SPI). The Government has embraced iSPIRT's view that the SPI can transform India.

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In fact, the setting up of a Rs. 10,000 crore fund of funds to catalyse start-ups in the MSME sector fits very well with iSPIRT's efforts to improve competitiveness among the Indian SME's. We are also happy that the Government has recognized the need for a framework to be set up for resolving tax related issues.

Incidentally, NASSCOM also lauded this area.

The proposal to set-up a Rs. 10,000 crore fund for start-ups and entrepreneurs will act as a great booster for the growing start-up landscape and will help drive innovation and solutions for the global as well as the domestic markets. At the same time, a pan-India "Digital India" programme will promote digital inclusion with broadband connectivity up to the village level, thereby enabling improved access to services through IT enabled platforms, NASSCOM underlined.

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NASSCOM felt that leveraging technology for access and governance was another key highlight of the budget. The Ebiz initiative, E-kranti, Virtual classroom, E-visas, Financial Inclusion Mission and many others will help to enhance technology usage in the India market. The industry will look to partner with the government on these initiatives and would urge the government to address key challenges in the current procurement processes so that the industry can contribute optimally in this national agenda. Skills development, infrastructure, innovation and social development were other welcome highlights in the budget that would enhance India's long-term competitiveness, it stressed.

"SPI is an enabler for many other industries like Defense, Electronics and Communications. Naturally, a healthy software product industry brings endless possibilities to the country prime among them employment. The creation of 100,000 Software Product Companies in India will lead to the creation of  over$500 billion in market value in a decade and the upliftment of more than 30 million SMEs," said Bharat Goenka, Tally Solutions & Co-Founder iSPIRT

"The special mention of the Software Product Industry (SPI) in the Union Minister of Finance's Budget speech is indeed a shot in the arm for the industry. SPI is an enabler for many other industries like Defense, Electronics and Communications. Naturally, a healthy software product industry brings endless possibilities to the country prime among them employment." added, Rishi Krishnan, Director, IIM Indore, Co-Founder, iSPIRT