What the IT Industry Expects from Budget 2019

Budget 2019, the first major event after Prime Minister Narendra Modi led NDA came back with an enormous mandate, is due to be announced on 5 July 2019 by Nirmala Sitharaman, India’s first woman full-time finance minister. Naturally, the expectations run high in the IT industry, which is expecting the Budget 2019 to give the much needed boost to the slowing economy.

The startup companies especially expects major steps be taken to boost the ecosystem in India. Measures that will lead to growth of the economy and increase in jobs are also being expected. While expectations from the Fintech industry was covered earlier this week, here is what industry leaders and startups expect from the budget 2019.

Budget 2019 and Cyber security

Need National Cyber Security Strategy - Deepak Maheshwari, Director of Government Affairs, Symantec, India, ASEAN & China

With the ubiquitous hyper connectivity and horizontal integration of technology across all walks of life, it is not at all surprising that cyber security threats featured amongst the top four risks by the World Economic Forum in its recent report. India is neither immune nor an outlier to this global phenomenon. To foster trust in technology and bolster overall security, it is imperative that India enhances its cyber security readiness and posture, especially in the critical infrastructures including governance, banking and financial services, energy, telecom and smart cities. The budget should mandate setting aside 10% of the respective technology budgets for every government project exclusively for cyber security, as per the recommendations of the NASSCOM Task Force set up in response to the Prime Minister’s behest. Besides enactment of data protection, we need a comprehensive National Cyber Security Strategy, both enriched via public consultations; and aligned with global best practices.

Push to Cyber Safe India - Deepak Gupta, CTO and Co-founder, LoginRadius 

From this year’s budget, we anticipate a strong push to ‘Cyber Safe India’ initiative, especially when it comes to privacy and consent management. With the increasing digital transformation, it’s necessary to have a process that oversees how companies save citizen data. The focus of such a framework should be cybersecurity and cyber frauds so as to ensure that organisations prioritise data protection. The impetus will help position India as a global hub for providing cyber security solutions; putting more emphasis on data privacy and security of Indian identities. The Indian citizen data should ideally reside in India. Government has certainly put India on a digital innovation fast track, A collaborative framework for the public and the private sector will help create 100% digitally enabled services ensuring secure and seamless citizen interactions across service managed by new technologies such as IoT, AI, and analytics.

Data Privacy and India Citizens - Saurabh Saxena, Country Director, Micro Focus India

The 2nd term of the Government at helm ensures a perfect opportunity to rehabilitate the economy for sustainable development in India. India is heading towards becoming a knowledge economy. With the rapid digital transformation happening across industries, the cybersecurity concerns have also risen significantly. It is hence imperative for the government to ensure data privacy of Indian citizens, so that they are truly empowered to use IT infrastructure and e-governance services. We look forward to collaborating with the government to help our nation in their digital transformation journey. As such, we hope to have policies around Information Technology that would provide the industry with certainty and enable them to invest in long-term strategy. Moreover, we hope to have tax friendly policies that would contribute significantly to the country’s GDP, and owing to the huge workforce and India’s potential, we are confident that the government will come up with innovative reforms.

Budget 2019 and Skilling

Need for Upskilling Indian Youth - Sudeshna Datta, Co-Founder and Executive Vice President, Absolutdata

With technologies like artificial intelligence, machine learning and data analytics disrupting the very nature of industries, there is an urgent need for upskilling and reskilling the Indian youth. Therefore, we hope more funds will be allocated towards the development of tech-based skill-building and training programmes.

Provisions for academia - Shekhar Sanyal, Director and Country Head, IET India

The work environment is changing at a rapid pace, the government needs to set aside resources to ensure that the country creates an ecosystem for the future of work and skill development, to enable Indians to be globally valuable and competitive. The government regulatory framework around skilling and future of skilling and work require continuous research and input which the budget should allow for. We hope to see more provisions for academia to spend on new technologies and expand their facilities to help students with exposure to real-time application of new-age technologies.

Re-classification of Re-skilling in GST - Vineet Chaturvedi, Co-Founder, Edureka

The future of the Indian professional sector, especially IT and IT services, hangs on how soon they can adopt the skills relevant to future economies. Investments in skills and education can be directly mapped to a country's commitment to economic growth, and at the moment, a re-skilling allowance for all tax-paying individuals can be a catalyst for faster and wider adoption of skills. There is already talk of the government planning on incentivizing corporates to invest in skilling their workforce, but a rebate that treats skills on par with allowances such as HRA, LTA, DA is the need of the hour to help retain our country's reputation as a skill powerhouse and give a boost to our GDP. Also, a re-classification of re-skilling in GST to treat it as a necessity and not a luxury would help accelerate up-skilling among Indian professionals.

Skill Manpower for Employment Boost - Javed Tapia, MD and CEO, Clover Infotech

The Indian IT services industry is at a watershed moment. It has strongly aligned itself to ride the global digital transformation wave. There is a huge demand for skilled talent in IT services and the budget should earmark funds to address this. A thriving IT services sector will not only augment exports but also fuel the growth of our consumption economy. The government must introduce favourable policies, tax benefits etc. for skilling manpower and provide much needed employment boost.  Enabling IT companies to strengthen India's digital capabilities and train and employ human capital to seamlessly work on new-age digital technologies is the need of the hour.

Budget 2019 and Digital India

Enable Digital Infrastructure - Anil Valluri, President of NetApp, India and SAARC

The re-election of this government ensures continuity of the Government’s compelling vision for India to boost the economy and put India on the technology superhighway by 2030. Through the Union Budget 2019, it would be key for the Government to put the spotlight back on its flagship initiatives like Digital India enabling digital infrastructure as a utility to every citizen, governance and services on demand, and digital empowerment of citizens. With the help of technology, the government should focus on catalyzing the smart city programme, to become growth engines for the country’s economy. We definitely look forward to seeing the government fortify the investments in the Artificial Intelligence sector as indicated in the interim budget, so that the benefits of AI technology can reach the masses. Priority should be laid on delivering this in the short, medium as well as long term - in order to shape the architecture of our society into a global one.

Smart City and Digital India – Sudhindra Holla, Director, Axis Communications, India and SAARC

We believe that with the re-election of NDA government will ensure the continuity of its vision 2030 and continue the momentum on infrastructural development of highways, ports, transportation and rural connectivity. We expect more investment in Geospatial and Defence sectors, envisioning India to become the launch pad for satellites as part of Vision 2030. We look forward to seeing the Government fortify investments in the defence and border security for protecting our soldiers who are the pride and honour of the nation. Furthermore, with its flagship initiatives of Smart City and Digital India the focus on internet penetration in rural areas would help democratize AI for citizens. Priority should be laid on delivering these to augur the economy by providing a growth impetus that lays down a vision for the next 10 years.

Exponential Growth in Adoption of Digital Platforms - Ishan Gupta, MD Udacity India

The current government's Digital India initiative has played a pivotal role in empowering the country with digital assets. In the last few years, we have witnessed an exponential growth in the adoption of digital platforms for education, healthcare, banking and more. In the upcoming budget, I expect the Finance Minister to focus on providing equal opportunities to the readily available 500 million internet users while further expanding this base and the gamut of digital services to create a thriving knowledge economy. The Government should also focus on challenges like data security to ensure a sustainable digital transformation.

Strengthen Investments in the IoT Sector - Juergen Hase, CEO, Unlimit

We look forward for the government to strengthen investments in the IoT sector, so that the benefits of IoT technology can reach the masses. The key to the success of the Digital India initiative lies in making the necessary reforms to the tax structures including GST, and driving domestic innovation coupled with fiscal incentive schemes. With a view to accelerate the adoption of IoT services and achieving the NDCP’s goal of 5 billion connected devices by 2022?, we strongly believe that the GST rates for digital products and services should be reduced from current rate of 18%. As the government aims to build one lakh digital villages in India in the next five years, it’s imperative that the services are affordable to the end customers, hence, companies working in digital sector should be given incentives.

Digital India 2.0 - Sanjay Motwani, Vice President, Asia Pacific, Raritan

Companies in India have been benefiting immensely from government’s mission of Digital India. We hope that the budget will focus on initiatives that drive the process of digital adoption and improve existing reforms as a part of ‘Digital India 2.0’. The industry is positive that the ongoing projects like smart cities, digitalisation, state data centers will maintain its pace. New technologies like IoT, AI, ML empower most or all of these segments and we are confident that the budget for every segment is going to contribute directly or indirectly to the IT industry.

Digital-first Economy - Praveen Agrawal, Managing Director, OakNorth

We expect sustained push towards a digital-first economy, which would include support for R&D and AI, reduced regulatory restriction on use of technology in financial services sector, and simplified tax deduction at source (TDS) and repayments in online lending.

Budget 2019 and Jobs

Schemes to create jobs - Shashank Dixit, Founder and CEO, Deskera

Right on the top of my wishlist for this year’s budget are schemes to create jobs as that is integral to a lot of other systemic issues outside of unemployment such as affordable housing.  More, high-quality jobs typically help address all other societal problems. I strongly feel SMEs taking to digital tools and becoming more efficient, will drive better jobs and outcomes. These initiatives will help us avoid stimuli, such as Universal Basic Income Schemes and other alternatives. The only other piece on my wishlist is to abolish the angel tax for government recognized startups and SMEs.  It's unfair in structure and policy and curbs growth within SMEs and is largely detrimental to building a world-class startup and SME ecosystem in India.

Increase Limit of Employee Tax Benefits – Bhavin Turakhia, CEO, Zeta and Flock

For the upcoming budget, two key areas to focus on are – technology and India’s salaried population. India’s online economy has made significant strides, shifting from a largely ‘cash on delivery’ model to now clocking a massive number of online digital transaction. In the upcoming budget, an increased focus on giving better sops to build an infrastructure that can continue to empower individuals digitally will further boost our economy. Also, with technological disruption being key for startups’ growth today, we would urge the government to encourage investments in technology hubs that will help strengthen technologies such as AI, ML etc. The government must also work towards bringing in some respite to GST, by reducing the tax slab for technology services and products, encouraging the early adopter market to flourish. For salaried employees, in the past few decades, we haven’t witnessed any increase in several allowances that are offered. For instance, the meal allowance is only ₹50 per day; while children education allowance has a limit of just ₹100 per month and the driver salary limit is only Rs 900 per month. It would be of great benefit for the salaried people employees if the Union Budget 2019 considers increasing the limit of such employee tax benefits.

Budget 2019 and Startups

Ease Path for New Business Creation - Gaurav Jalan, Founder and CEO, mPokket

In the NDA government’s previous tenure, the startup ecosystem witnessed several key developments, especially in terms of ease of doing business. But there are many issues that remain unaddressed. As they successfully secure their second consecutive term in the office, we expect the government to further ease the path for new business creation. Regulations need to be progressive and not overly focused on risk control at the expense of innovation and experimentation. The issue of Angel Tax specifically needs to be addressed, as it is a big impediment to new business growth. We expect the government to undertake  initiatives in order to give the startup ecosystem a boost, which will in turn enable startups to play a significant role in driving the country’s economic growth.

Increase Lowest Tax Bracket - Mayank Bidawatka and Aprameya Radhakrishna, Vokal

An economy grows leaps and bounds when many new people get additional spending power. We’ve seen that happen in China and the positive effects of disposable income increasing. The amount collected from income tax is very low in India. A very small % of the population pays this tax and most non-salaried people find smart ways to avoid paying this tax. Of the salaried, majority of the people paying tax are in the lower rung. As a result the have-nots get axed. Instead if we could increase the lowest tax bracket from 2.5 lakhs to 6 lakhs, that could help increase disposable income for the majority. Taxes could shift more towards consumption rather than on earnings. Even abandoning income tax for people and increasing it on luxury consumption could have a huge effect in giving a fillip to the economy. The angel tax caused a lot of heartburn in the ecosystem. While the tax was abolished, we should be careful of any policy that hurts the startup ecosystem.

Simplify Business - Abhishek Goenka, CEO and CFO, CoWrks’

The complexity of doing business remains very high. For every positive initiative taken, there has been, perhaps unintended, measures that drag down the entrepreneurial spirit. No doubt we have had a marked improvement in the rankings and that is commendable, but if there is one area that the Government really wants to focus on, it should be on simplifying business. This requires a concerted effort, a plan that includes the smallest of steps to be taken and perhaps should be done without a slogan attached to it.