Budget 2017: IT, BPO and business technology cos want more

The Indian IT and BPO industries along with business technology companies welcomed the Budget 2017 presented by Finance Minister Arun Jaitely.

Microsoft India president Anant Maheshwari

The 2017 budget’s focus on extending market relevant training for the youth and setting up 100 international skill centers across the country is a positive move. The emphasis on science and technology for students and launch of SWAYAM would further empower India’s youth for the future.

Microsoft India has welcomed the increasing focus on cybersecurity, which is critical to securing the economy’s digital transformation. The reduction of corporate tax for MSMEs is a welcome move and will boost the economic growth.

Rajesh Gopinathan, CFO of TCS

The Budget 2017-18 focuses on Inclusion, Transparency, Fiscal Responsibility and gives a big push to the Digital economy. It encourages a shift to digital platforms with incentives to payers as well as merchants driving convenience, efficiency and transparency. An increased allocation to BharatNet will bring high speed broadband connectivity to more than 150,000 gram panchayats, with wifi hot spots and access to digital services at low tariffs. The DigiGaon initiative will provide telemedicine, education and skills through digital technology will increase empowerment.

Partha DeSarkar, CEO of HGS

The Budget has taken a well-balanced approach towards rural growth, infrastructural development and an evolving digital economy. The Government’s transformative move to enhance the ‘Skill India’ campaign with 100 skill centers and online training platform Swayam is a positive step. The focus on quality education through a revised framework for educational institutions and employable skill development for the younger generation will encourage the IT /BPM sector to further deepen their presence in Tier II and Tier III cities.

Given that there is a clear cost advantage to operating out of non-metro areas, we believe the focus on improving connectivity and infrastructure in rural areas through the BharatNet and Digital Village initiatives will help in creating balanced growth. Also, increasing the MAT credit carry forward period from 10 to 15 years will help companies in SEZs to utilize the same when moved into normal tax regime

Nita Kapoor, head – India New Ventures, News Corp 

Much like the Startup India initiative, the Budget 2017 has left the Indian startup community asking for more. Be it a 5 year tax holiday or the profit linked-deductions for start-ups are benefits which are virtually redundant. This is because there is a long gestation period for them to even break even, forget achieving profitability.

Satya Prabhakar, founder and CEO of Sulekha

Reduction of income tax by 5 percent, from 30 percent to 25 percent, for SMEs with a turnover of less than Rs 50 crore indicates Government’s belief that it expects the SMEs to be major drivers for the economy. Reducing the LTCG window for property from 3 years to 2 years and putting affordable housing (below 30L) under infrastructure development category is also a significant step to improve the real estate sentiment in the country.

Rostow Ravanan, CEO and MD of Mindtree

Several measures introduced in the 2017 Union Budget are an important step towards building India into an important digital economy. This budget has made special provisions to ensure greater financial growth, with emphasis on enhancing cybersecurity in finance, and bringing greater coordination and transparency between departments. The Computer Emergency Response Scheme is a great initiative which will smoothen coordination between finance regulators. The push to drive adoption of mobile and an Aadhaar-enabled payment system will help bring in greater financial inclusion amongst citizens.

Additionally, IT exemption for start-ups will help reduce income tax for smaller companies with a turnover less than INR 50 crore, which we believe will significantly improve the ease of doing business for smaller businesses and start-ups in India. There has also been a revision in personal income tax rates which will boost consumption to some extent.

The new budget has also made provisions to raise India’s innovation quotient, through the setting up of an innovation fund to encourage and fuel innovation amongst youth. The budget’s focus on making education more accessible to educationally backward blocks, along with the steps taken to ramp up the Skill India Mission will also help in maximizing the potential and capabilities of youth in the country.

Prabhu Srinivasan, chief strategy officer of Intelenet Global Services

The addressal of MAT is a step in the right direction, with the current amendment to increase the tenure for usability of refunds from the current 10 years to 15 years, while laying emphasis on the eventual abolishment of this tax type.

The ongoing move toward GST too is a commendable effort, and we await the clarity promised from GST council on the move toward implementation.

Altaf Halde, managing director of Kaspersky Lab- South Asia 

Budget 2017 has all ingredients to make Digital India a reality. It has spelled out the importance and roadmap for enhanced security of the digital platform. Post demonetisation the number of digital transactions have increased, and also the concerns about cyber security.

The government has taken a step to address this by announcing to set up ‘Computer emergency response’  team for cyber security of financial sector. It will lead to collaboration between the technology companies and the banking system in the country.  For sure, this will create more opportunities domestically for the IT and technology businesses in India and offer higher trust level for customers.

Vijay Shekhar Sharma, founder and CEO of Paytm

It is a digital economy budget. Government has pushed the digital theme in every area of the budget. Every person from a small shops to consumers are pushed towards the digital economy. Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments.

Incentives for labour intensive sectors including housing,  farming and dairy will help SMEs to create new jobs. Focus and attention to bank NPAs, as well as increasing bank capitalisation is great step towards strengthening the financial system of the country. Finally, the income tax rate changes will encourage more people to report their incomes and create a larger tax net for the country.


The Budget presented reinforces Government’s reliance on technology for achieving development goals, as it focuses on Infrastructure and empowering startups and SMEs, although IT industry expectations on facilitative proposals remain largely unmet.

The budget evangelizes digital payments and infrastructure, along with promoting a transparent business environment. It is also promising that the Government is dedicated to change the colour of money on the back of tax reforms, political funding, digital transactions and policies that dis-incentivise the use of cash for high value transactions.

The technology sector sees many emerging opportunities arising out of Govt. reliance on technology driven development like initiatives like SWAYAM, policy for Metro with focus on indigenisation, pension platform for defence, Digi Gaon etc.

Medium and Small Enterprises occupy bulk of economic activities. Government’s encouragement to SIDBI to refinance credit institutions providing unsecured loans, at reasonable interest rates, basis transaction history, should benefit technology sector where tangible collaterals are difficult to offer.

For the IT sector, leading the start-up journey, extending the time period for eligibility for the 3 year income tax exemption, from 5 years to 7 years will allow for startups to actually avail the benefit, as most startups do not make profits in the initial years of their operations.

Government support for investments and scaling up, by allowing carry forward of losses even if stakes are diluted beyond the stipulated 51 percent, subject to safeguards, was part of several recommendations from NASSCOM on strengthening the start-up ecosystem. However, other equally critical recommendations related to harnessing domestic investors and removal of angel tax have not been accepted.

TDS on payments to call centers have been reduced from 10 percent to 2 percent. This will improve working capital available with call center companies and potentially support companies in their expansion to Tier 2/3 locations.

However, this is possibly the only IT sector focussed announcement in the budget. Several Industry recommendations to help sustain and grow global competitiveness of the sector like support for Research, development and innovation, rationalising safe harbour margins to more realistic levels and roadmap for corporate tax reduction have not seen place in the Budget 2015-16.

Vishal Agrawal, managing director, Avaya India

While the Budget 2017 resonated with digitization as the core of all government initiatives, it presented a comprehensive roadmap to achieve it as well. Major schemes like roll out of Aadhaar-based smart cards for senior citizens, promoting digital payments at petrol pumps & hospitals and directing Rs 2,500 crore digital transactions across platforms like UPI will prove to be major differentiators in making this possible, and pace up India’s move towards becoming a completely cashless economy.

Technology will play as a major facilitator to integrate all of this together and empower the common man at the end.

Shibu Paul, regional director at Array Networks

This is a forward looking budget with the balanced Tax soaps, IT rebates, focus on rural areas and SME development. Also, the reduction in tax for companies with less than Rs 50 crore turnover which will now be placed at 25 percent is a big win for MSME sector and around 96 percent of the companies will be benefitted by this major announcement.

Sriram S, co-founder and director at iValue InfoSolutions

It is a balanced budget, which will drive growth with prudence and addressing needs of the poor. The major thrust on Capex growth of 25 percent should drive demand. The focus on infrastructure and rural areas are welcoming.

As the digitization was one of the core area for this post demonetization budget the promotion of BHIM app and plan for Aadhar based payment without mobile is an appreciable initiative. Also, limiting the cash transactions to 3L is a good step which could have been pegged at 1L. The 25 percent corporate tax cap for companies up to 50Cr revenue is a great step which will benefit more than 90 percent Indian firms. 50 percent personal tax reduction for 2L to 5L slab should help the emerging class.

Padmanabha Krishnamurthy, CFO, Paladion Networks 

We see a positive and bigger push towards a digital India in the Union Budget for financial year 2017. Allocation of over Rs 10,000 crore for the Bharat Net Project to provide Wi-Fi hotspots to more than 150,000 Gram Panchayats will truly democratize digital access and the change the cyber landscape in India.

Andy Stevenson, head of India, Turkey and Middle East, Fujitsu

While the move towards an internal ‘borderless’ nation  will obviously benefit the nation, as has been discussed in various forums – an emphasis on infrastructure in terms of electrification, digital services, roads etc. will further build on the foundation  to India being a world class economy.

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