Quote from CEO and Co-founder Cians Analytics Aman Chowdhury on Pre-Budget expectations:
With the new NDA government ready to present its first interim budget, the Centre’s promise that it would put technology in the forefront has fuelled the expectationsof the IT, telecom, and e-commerce industries.With a market size of over US$ 118 BN and exports over US$ 86 BN last year, India’s IT industry has a long wish list when it comes to the Union Budget.
At a broad level, the sector is hoping that the budget would clarify the various vexing taxation issues and royalty implications on software (both retrospective and on services), eliminate minimum alternate tax on special economic zones (SEZs) and take steps to minimize litigations. The budget is expected to streamline the procurement process for technology products and services including SME participation, settle long pending dues on projects executed for the Central and State governments, and provide incentives for the adoption of IT across sectors.
It should also provide monetary or infrastructure benefits to start-ups focused on intellectual property creation. Alternatively, the telecom sector has witnessed regulatory uncertainty in the past two years on both tax and regulatory fronts. Its key expectations include an increased emphasis on faster roll-out of the 3G and 4G networksand greater penetration of fiber-to-home.
The sector is looking forward to reforms and policy-level changes aimed at ironing out the creases created by retrospective changes to tax laws andan increase in withholding tax rates etc. in the last few years. The re-introduction of tax holiday benefits (i.e. Section 80IA), availability of tax credits, and mechanism for curtailing multiple indirect taxes on the supply of intangiblesare expected to restore the lost confidence of businesses and investors.
The sector is also looking forward to other administrative reforms such as fixing timelines for the disposal of applications and following judicial discipline, thus avoiding mindless adjustments that result in unnecessary litigation etc.On the e-commerce front, the Modi-led government has hinted towards allowing 100% FDI to spur manufacturing and consumption.
This is expected to benefit the market and make it more dynamic, thus increasing the contribution of e-commerce to the country’s economy by 4% in 2020. Finally, as these industries stride forward, they would also keenly watch for initiatives in the areas of infrastructure development and education.