India government is planning to enhance digital transactions in rural India by allocating Rs 10,000 crore for Bharat Net’s broadband project.
The investment will empower more than 150,000 gram panchayats with high speed internet and Wi-Fi hotspots.
While this sets the right impetus for rural India to come online, the government has further taken the steps necessary to ensure optimum level of cyber security.
“We appreciate the Computer Emergency Response Team to be set up post the budget announcement and monitor cyber hacks, ensuring the security and integrity of online data. The synergy created by these announcements, along with the efforts of cyber security solutions is going to further inspire new users to come online, aiding India’s transition to a digital economy,” said Amit Nath, head of Asia Pacific – Corporate Business at F-Secure.
India Budget 2017 has prepared a solid foundation for another disruption in form of the incoming GST reform.
“With the clear agenda of honoring the honest tax payers and paving the way for digitalisation of the economy, the Finance Minister indicated that technology is going to play a major role in implementation of Government’s clean up agenda. Accordingly, indirect tax on devices related to digital infrastructure is exempted to give a boost the industry,” said Rashmi Deshpande, associate partner at Khaitan & Co.
The service tax rates along with excise rates that were pegged to increase to be line with the proposed GST rates remained untouched.
The e-commerce industry should gear up for an overhaul in terms of its system to keep in line with GST as the Government made amply clear its readiness for the tectonic policy reform.
Proposal of introducing Rs 20 lakh Aadhar based Point of Sale (POS) machine will be a game changer for digital payments ecosystem in the semi-urban and rural areas where conventional POS machines are absent and people do not have access to mobile phones.
“Though it remains to be seen if the proposed setting up of Payments Regulation Board under RBI and amendments in the Payments and Settlement Act will bring about fundamental changes to accommodate the fast changing digital payments ecosystem in the country,” said Rahul Gochhwal, co-founder of Trupay.
“Finance Minister Arun Jaitley made several references to using data mining to improve the efficiency of the various tax departments specifically with regards to transforming India from a cash driven to a digital economy using new measures such as Aadhaar Pay,” said Sunil Jose, managing director of Teradata India.
“Aadhaar based smart cards for monitoring the health of senior citizens is a great way to leverage the citizen identity database while marrying technology with health. The move will reduce the burden on our health machinery to some extent and open up avenues to explore more applications of digital citizen identity database,” said Neel Ratan, leader – Government and Public Sector at PwC India.
The focus on digital payments will lead to revolutionary transformation in Indians’ payment habits. Digital payments will be the new normal in 2017 and we are very excited about this. As we become more digital, India will see new taxpayers and better transparency in incomes.
“Upgrading digital infrastructure to support cashless transactions in rural and semi urban areas will encourage more merchants and consumers to transact on non-cash and online platforms. However, we feel that the government must have also considered promoting startups in the digital payments and digital security areas,” said Bipin Preet Singh, founder and CEO of MobiKwik.
The budget also promoted the startup ecosystem with tax benefits. Reduction in the corporate tax for Medium and Small Scale Enterprises (MSMEs) to 25 percent will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast.