by ChannelWorld

Budget 2015: Technology Vendors are a Happy Lot

Mar 02, 20157 mins

Positive, bold, pragmatic: That’s what the Union Budget 2015 means to India’s top technology vendors. 

The much awaited Union Budget 2015 is finally out and it can be said that technology vendors are quite happy.  A major development according to vendors was the removal of SAD on all components and clarity on the inverted duty structure. Here are first reactions from some of India’s top technology vendors:

Alok Ohrie, President and Managing Director, Dell India The positive budget reaffirms the reform stand taken up by the government and its commitment to investors. Some of the forward looking statements made by the Finance Minister have a bearing on our sector–exemption of SAD, reduction of Basic Customs Duty on electronics components, inputs etc., ease of doing business, encouraging start-ups and the big boost to healthcare. However, we’ll need to review the notifications before any predictions could be made on the impact on the sector. The economic survey has indicated that a clear political mandate for big bang reforms coupled with a benign external environment can propel India to a double digit growth trajectory. Today’s announcement only goes to support this. Dell has been a major contributor to the IT sector in India. Apart from being India’s most trusted technology brand, Dell’s manufacturing facility for electronics has been shouldering the ‘Make in India’ mantle for more than 7 years.  

Altaf Halde, Managing Director – South Asia, Kaspersky Lab Overall the budget is well structured.  The announcement regarding bridging the digital divide between the urban and rural India is a welcome move.  The announcement of allocating Rs 150 crore to create a world class IT hub in India under the Atal Innovation Mission is very encouraging. Skill development also got a special mention in the budget encouraging the youth to be entrepreneurs rather than job seekers. This was followed by the announcement on supporting start-ups. The rationalization of service tax by including education cess is a good move. The increase will however impact our software sales. The lack of infrastructure development was a concern and it is well addressed in this budget with clear road maps and allocation. This will contribute to the overall development of the country. Reduction in corporate tax is also encouraging. 

Amar Babu, Managing Director, Lenovo India Budget 2015 is a positive and balanced budget that touches upon many areas of infrastructure, universal social security vision, insurance for all, and education among others. From an IT industry perspective, it is a mixed bag with the inverted duty structure being finally addressed with the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2 percent without CENVAT credit are positive steps to encourage tablet manufacturing in India. However, no initiative has been taken to increase PC manufacturing and promote exports.  In this budget, we might have missed an opportunity to drive ‘Make in India’ in computers.

Anil Valluri, President, NetApp India & SAARC It is a bold and assertive budget. We are pleased to know that local businesses and budding entrepreneurs stand to make a mark globally through various schemes that will help them prosper. A number of steps have been announced to improve the ease of doing business; creation of Micro Units Development Refinance Agency (MUDRA) Bank, with a corpus of Rs 20,000 crore, and credit guarantee corpus of Rs 3,000 crore is a positive step to encourage young, educated, skilled workers who aspire to become first generation entrepreneurs or expand their activities. With robust growth in the Digital India initiative announced last year, it is heartening to see that the Government wants to further expand it and increase the network connectivity to more rural areas. A progressive and investment focused budget overall from which we hope to see tremendous growth for the Indian economy.

Anil Chaudhry, Country President & Managing Director, Schneider Electric India The Union Budget 2015-16 has created a sustainable growth momentum by focusing on allocations for infrastructure and subsequently a higher emphasis on the fiscal deficit. The measures and allocations announced in the budget should accelerate large-scale infrastructure development in India. The government’s decision to allocate Rs 70,000 crore augurs well for the infrastructure sector. We applaud the decision to set up a national infrastructure fund with an annual outlay of Rs 20,000 crore as it will boost the planning and development of upcoming infrastructure projects. The budget looks pragmatic and the increased outlays on infrastructure will see the creation of job opportunities in the country.

Rakesh Dugar, Chairman & Managing Director, Mitashi Make in India, ensuring employment to our youth, and the fact that we have to make India the manufacturing hub of the world are great moves announced in the budget. Reduction in custom duty on raw materials and intermediaries is good for the sector. Introduction of GST from next year and delaying implementation of GAAR is positive for the business in India. The fast paced clearance for starting business in India will attract more investments to the country. The National Skill Mission, to develop employability of youth below 25 years of age, will address the existing gap of trained manpower. Introduction of a comprehensive bankruptcy code for the ease of doing business by 2015-16 is an encouraging one.

Ravi Swaminathan, MD, AMD India & Corporate Vice President, AMD South Asia The announcements made in the Union Budget 2015 are certainly a step in the right direction to boost growth of the technology sector and also further drive investments. The exemption of all special additional duty (SAD) on inputs/components is a significant step towards integrating India into the global supply chain enhancing the technology capabilities in hardware. Further, the thrust on NOFN will provide a tremendous opportunity to bring Digital India’s vision to the fore. The opportunity arising from enhanced connectivity will address the issue of enhancing infrastructure penetration in the country. Broadband connectivity, improved access to services through IT enabled platforms, greater transparency in government processes and special focus on supporting software product start-ups are noteworthy initiatives towards enabling not only the industry but also citizens at large.

Sanjay Rohatgi, Vice President, India, Symantec Continuing on the direction set last year, this is an excellent budget focusing on the outcomes and not just the outlays–aligned with the flagship programs, namely Make in India, Digital India, Skill India and Swach Bharat. Technology is going to be a critical enabler whether it is for making GST operational; direct benefit transfers and cashless transactions; e-Biz portal or enabling booking of unreserved railway ticket through mobile phones for the masses. However, to ensure wider adoption of technology, it must be safe and secure to foster end-to-end trust. Overall, a pragmatic and progressive budget, indeed.

Sunil Khanna, President and MD, Emerson Network Power India We welcome the Union Budget 2015-16 as a pro-people and growth-oriented budget. On the corporate front, the focus on infrastructure and the desire to make taxation regimes simpler as well as deferring GAAR by another two years, is a welcome addition. We look forward to a long-term and sustainable growth path as set by the honourable Finance Minister. Specifically from the perspective of Emerson Network Power, the plan for investment in infrastructure and enhanced rate of GDP growth at 8 percent for the next two years will augur well, spurring business momentum. We are particularly excited with the emphasis laid on the renewable and solar energy space as this will bolster investment in the power generation space and will drive overall growth for the economy since energy is key to 24×7 functioning of businesses.