Reactions on Union Budget 2018

Surendra Singh, Country Director, Forcepoint
“The government has come out with a truly ‘Bharat’ budget and has introduced several inclusive digital programmes for rural India to reap benefits of information technology. From doubling the outlay for promoting digital economy for the next year and  plans to speed-up digitisation with initiatives such as implementing five lakh WI-FI hotspots to provide the internet to rural citizens, connecting one lakh gram panchayats via internet cables, announcing a national program to direct efforts in Artificial Intelligence and increased digital intensity in the education sector are welcome steps.

"However, as more technology use grows amongst people so would be the need to become aware of cyber threats. Cyber security will now be more important than ever for securing digital assets as more and more people connect and conduct business using technology. There is a requirement of holistic strategy that provides cybersecurity frameworks for both public and private sectors with the government educating and ensuring compliance.

"The strategy should be all encompassing including small and medium enterprises (SMEs) as they don’t have expertise to deal with emerging cyber security attacks. A lot more focus needs to be put on educating the public and it is not just the government but also a corporate responsibility.”

V Ramakrishnan, CFO, TCS
"This is a forward looking, growth-oriented budget with a focus on the rural economy, healthcare for the poor, investments in infrastructure, Digital skilling, education and jobs creation. Several programs announced in the budget represent big strides in building a Digital India: the outlay for the smart cities program; the plans to explore blockchain technology; the national program for adoption of artificial intelligence and for research, training and skilling in  cyber-physical systems; the innovative use of technology to digitally reimagine agricultural markets to empower small and marginal farmers; and the extending of broadband access to 5 crore rural citizens to bridge the digital divide.

"Lastly, having partnered the State Bank of India in their highly successful and seamless merger with six associate banks, we are excited about the planned merger of the three public sector insurance companies. I would rate this budget a score of 8 out of 10."

Archit Gupta, Founder and CEO ClearTax
"Standard deduction has been reintroduced but at a cost, it takes away medical reimbursement and travel allowance. There were several demands to raise medical reimbursement from 15,000 and bring it up according to current prices (the amount has been same since more than a decade). However, now the clamour for raising this limit will die down. With this, for a salaried, the amount taxable under salary shall be reduced by Rs 5,800. While cess will go up by 1 percent. Senior citizens have much to rejoice and will face much lower burden of taxes, this is especially crucial in the falling interest rates from banks and deposits."

Ms. Chanda Kochhar, MD and CEO, ICICI Bank
“The Union Budget 2018-19 has done a commendable job in holistically addressing the various priorities of the Indian economy. It has addressed social sector priorities and charted out a clear plan to boost infrastructure, while maintaining fiscal discipline.

"The wide ranging measures announced for various segments of the rural economy will boost income levels and create gainful and sustainable employment. This, in turn, will help to increase consumption levels in the economy.

"The far-reaching National Health Protection Scheme, which will be the largest of its kind in the world, along with measures taken to enhance education, skilling and R&D are indeed welcome steps.

"The Government has also maintained its focus on creating infrastructure with an aim to catapult India onto a higher and sustainable growth path. The allocations for roads and railways are at all-time highs, which will have a positive impact on related sectors as well.

"All these measures have been undertaken with an eye on continued fiscal prudence.  Expenditure has been divided between budgetary and non-budgetary sources. The adoption of a maximum level for public debt to GDP will instil even more confidence in the fiscal framework.

"Overall, the budget has laid out a vision for higher economic growth along with social empowerment through a holistic approach to various sections of the economy."

Kalpesh Maroo, Partner, Deloitte India
“The appreciation in the public markets in the past 24 odd months along with a corresponding boom in the IPO markets have helped a large number of PE funds in exiting their portfolio companies.  Re-introduction of capital gains tax on listed securities together with the amendments to tax treaties withdrawing the capital gains exemption is likely to dent returns for PE funds. Moreover, it will be interesting to see if the move to levy capital gains tax on listed stock from the next fiscal will result in a capital rebalancing shifting investments away from equities and resulting in a relative cool off in the stock markets.”

P Promod, Partner, Deloitte India
"The last full budget of the present government has lived upto its expectations in terms of being a taxpayer friendly budget, especially focussed towards the less privileged ones.  There have been some major announcements on agriculture, health, development and advancement of social sector. The thrust of the budget has moved from “ease of doing business” in the past to “ease of living” which is clearly reflected in most of the reforms announced.

"It was expected that the tax slabs will be moderated this year but unfortunately, the tax rates have been maintained. On the contrary, the education cess of 3 percent has been moderately increased to 4 percent and this may increase the tax cost marginally across the taxpayers. The silver lining for individuals seems to be re-introduction of standard deduction of Rs 40,000, but that has come at the cost of withdrawal of transport allowance and medical expense reimbursement deductions.

"The objective seems to reduce the administrative and compliance burden both for individuals and employers as they need to maintain bills. Further, deduction for expenditure on medical expenses for senior citizens has been increased from Rs 30,000 to Rs 50,000. As a further relief to senior citizens, it has been provided that interest income upto 50,000 on deposits with banks and post office will not be subject to tax deduction at source.

"Last year, the Government announced the corporate tax rate of 25 percent for companies with a turnover of 50 crores (in FY 2015-16) and this limit has been enhanced to Rs 250 crores in financial year 2016-17,  bringing in respite to the MSMEs. Further, tax holiday announced for start-ups in 2016 has been extended for new such companies established after 1 April 2019 but by 31 March 2021 and definition of startups has widened. Long-term capital gain tax @ 10 percent has been introduced for gains on sale of listed equity shares on the stock exchange; however, grandfathering provision has been inserted to provide relief on the gains accrued till the Budget day will not be taxable.

"While the budget seems promising and forward looking in terms of development and sectoral reforms; however, it has not addressed the key expectations of stakeholders."

Shreyas Chandrahasan, Co-founder, Option3
“I feel the budget is a mixed bag, it is good to see that the government focuses on AI and Machine learning, which are areas new age companies are in to these days. There are Interesting update on MSME, Mudra and working capital improvement but we were expecting more on the ease of availing credit guarantee scheme. On the other hand, there was no mention of increasing tax holidays and tax rebates, especially for tech companies. There were no updates on angel tax as well. Trade receivables and GST integration was a grey area. We will have to wait and see how this will impact the cash flow.”

Sanjay Jalona, CEO and MD, LTI (L&T Infotech)
“The Budget gave major emphasis on healthcare, agriculture, education and research, which was great.  Use of technology in delivering education and focused research in technologies like Blockchain, AI, Big Data, IoT and Robotics are great initiatives and will create opportunities for the IT sector to contribute in making of tomorrow’s India. While reduction of Corporate Tax to 25 percent for a vast majority of companies is a welcome move, increase in cess from 3 percent to 4 percent will increase tax rate for larger corporates by 0.34 percent.

"The return of long term capital gains was well anticipated and the budget has brought it in a very calibrated manner which should not affect the investment sentiments. Overall, a good budget, the execution remains key and to be watched for."

Rajan Navani, Vice Chairman and MD, Jetsynthesys (Jetline Group)
“Budget 2018 demonstrated the commitment of the government on Digital India by doubling allocation, developing an increased focus on new technologies including artificial Intelligence and blockchain. The contribution of new age businesses and technologies over the next decade to GDP will be significant as will be the ability of Indian companies to be part of global supply chains through value added technologies. All of this will result in more entrepreneurs and additional jobs that will drive the future of a New India.

"The incentive provided to 5G, increased Wi-Fi hotspots and smart cities will drive greater data consumption which will particularly benefit the online and mobile gaming companies in India.

"ModiCare, different from ObamaCare, is something that should have been done in India long ago. The one item a common man doesn’t budget for is unexpected healthcare costs for family members and many a times it completely messes up his finances. Providing a cover of ₹5 lacs to 10Cr families is indeed the highlight of this budget 2018 and will be a game changer for India if implemented smartly and efficiently.

"Further, in our land of frugal innovation in healthcare, the same can happen at a fraction of the cost in western countries.”

Gaurav Hinduja and Sashank Rishyasringa, Co-founders of Capital Float

Fintech perspective  
Sashank Rishyasringa: “The Finance ministry has demonstrated incredible foresight. We appreciate that the Finance Ministry acknowledged the importance of digital lenders like Capital Float in aiding the growth of the MSME sector. As founding members of The Digital Lenders Association of India (DLAI), we met with the Finance Ministry, along with other leading Fintech lenders, last year and presented a whitepaper with recommendations to foster Fintech lending.

"We’re delighted to see those suggestions being incorporated in spirit and in letter. These include increased capital injection into the MUDRA Yojna up to Rs 3 lakh crores and doubling the allocation to the Digital India initiative. In addition, our request to access funds from MUDRA is also being considered by the Ministry, as they are reviewing the refinancing policy and eligibility criteria for NBFCs. We also welcome Arun Jaitley’s forward-looking approach towards adopting blockchain, which will play a crucial role in shaping digital payments in the country.”

MSME perspective
Gaurav Hinduja: “The Government and the Finance Ministry continues to identify the MSME sector as being critical towards increasing GDP and employment. The recapitalization of the PSU banks up to Rs 5 lakh crores and allocation of Rs 3 lakh crores in MUDRA loans ensures a higher availability of formal finance for credit-starved MSME segments.

"Another huge step towards boosting the growth prospects of MSMEs is the reduction of corporate tax to 25 percent for enterprises with a turnover of up to Rs 250 crores. The development of unique identities along the lines of AADHAAR for individual enterprises will enable us to further our efforts towards financial inclusion, as we can extend digital credit services to MSMEs with little to no documentation.

"The extension of Kisan Credit card to fisheries and animal husbandry farmers, and the allocation of Rs.10,000 crore for fisheries and aquaculture, animal husbandry funds further adds to the Government’s efforts towards absorbing more segments into the formal financial ecosystem."

Ms. Priya Mahajan, Head of ASPAC Public Policy & Regulatory Counsel, Verizon Enterprise Solutions

"We welcome the focus of the Union Budget on disruptive technologies such as Artificial Intelligence (AI), Big Data, Internet of Things (IoT) and Robotics. With the renewed focus on Digital India, we hope that the Government of India also consider additional reforms to the telecom sector. Reforms that will create a predictable, flexible, lightly regulated and reliant on technology policy framework that incentivizes the businesses to invest, reinvest and to compete in India’s telecom market on a level playing field basis.

"Reforms that will also provide consumers with greater choices to modernize and simplify regulations for all stakeholders. We are also encouraged that the government is considering series of initiatives to empower the Indian citizens with broadband access thereby bridging the digital divide. Broadband access will spur demand for digital services and usher in a new era of digital revolution, establishing India as one of the most robust ecosystems for investment and innovation in the world."

Ankush Johar, Director, Infosec Ventures
According to the Union Budget, cryptocurrency has been outlawed by the Government Of India.

"There wasn’t much mention of cyber security in this budget. At Davos the PM talked about cyber security as a focus area but that same ethos does not appear to be reflecting in the action on ground. Cryptocurrencies are not legal tender is a statement that was made earlier as well, and it is true and very likely that it is being used for illegitimate transactions. More clarity is important."

Anil Valluri, President, NetApp India and SAARC

"The last few years have seen large initiatives designed to bring about substantive change. The FY18 budget marks time, with its particular focus on agriculture, healthcare and infrastructure and the continued thrust on the MSME segment. The focus on wide scale broadband access, on Machine learning, AI and robotics, on R&D as well as skilling, and on Smart Cities will keep pushing India’s Digital agenda, well supported by the additional fund allocation. It is a quietly progressive budget, and timed well to focus on readying all cross sections of Indian society to reap the benefits of the future.”

Sridhar Krishna, Chairman and MD of Sankhya InfoTech

"The Union Budget 2018 presented today addressed many of the concerns of rural India and that of the MSME sector. We applaud Finance Minister, Arun Jaitley, for introducing measures to alleviate some of the pain points they suffer. The outlay for healthcare and education is a much needed boost to create a more healthy and skilled and educated India.

"On the civil aviation front, Finance Minister unveiled plans to increase the number of  airports in the country by 5 times in this year from a current total of 124. India is the third largest and the fastest growing domestic aviation market in the world with respect to the number of domestic tickets sold, and this plan will greatly aid in growing the number of trips to one billion a year. It further mentioned 56 new airports and 31 new helipads will be connected under the UDAN scheme.

"The massive expansion, as envisaged, will have a multiplier effect on employment opportunities in the aviation sector. It will also have a commensurate effect on training requirements which are of a critical nature. Pilots, airport staff, baggage handlers, among others will have to be given proper training to minimise untoward incidents, potential accidents and be on the ready to deal with emergencies such as that of Indigo Airlines in the recent past. The mismanagement and rude behaviour by the crew members highlights the need to improve the standard of training the professionals in the industry.

"In a major step, the Budget announced the largest government-funded health insurance scheme to be implemented anywhere in the world. The sheer size and coverage of the scheme committed will require investment to train and skill additional resources and address shortage of qualified medical professionals. India lacks trained experts, and the corresponding measure to increase the number of medical colleges will provide a boost. However, this needs to also be backed by improvements in training. Technology can help bridge the gap here, with cloud and virtual reality based training modules, there are now more efficient pathways for these front of line critical care providers to be on top of their game."

Neeraj Dotel, MD, India and SAARC, SAP Concur Technologies

“This is perhaps the most-awaited budget in the recent history with the country gearing up for the FM’s first budget post demonetization and GST - two of the biggest reforms of the Government of India. The budget FY 18-19 did not have many surprises, but must say some of the initiatives are quite welcoming.  

"The government is quite bullish on Digital India and Green India Mission. We see an increased focus on compliance and reduced time for filing tax and dependency on paper receipts, which will help propel the business processes. We also laud the initiatives towards the national programmes focusing on R&D and innovation and the increased focus on AI, ML and data sciences

"Ease of doing business, with a focus on MSMEs, and increased rural lending capacities by the Banks and Institutes, are clearly high on this year’s agenda. The MSME sector getting Rs 3,794 crore in the form of capital support and interest subsidy is a welcome change. This would give a much-needed push to the sector. Easing the corporate tax procedures for companies, will help bring down the burden of businesses and boost their revenues.

"For the direct tax-payers, introducing similar scheme for professionals with a greater focus on compliance to streamline the tax structure, will further boost paperless and e-transaction in the country and in turn reduce the carbon footprint.”

Sudhindra Holla, Country Manager – Axis Communications, India and SAARC

“We applaud the Government on the successful presentation of the Union Budget 2018. We are very optimistic with the focus given to safety measures in the railways, tracks & metros, equipped with CCTVs and WiFis. Vandal resistant cameras, light finder technology and thermal cameras will help in curbing crimes, give fog alerts and provide more timely action.

"Additionally, emphasis on the Smart City programme with an estimated ₹2.09 lakh crore outlay and improved connectivity across interiors, the national corridors and borders will involve use of higher end surveillance solutions going forward, making citizens more upbeat on such critical safety measures.”

Sanjay Swamy, Managing Partner, Prime Venture Partners
On MSMEs
“SMEs and consumers have a massive credit gap - digitisation & collaboration between government, PSU, Private Sector and Startup ecosystem is key - and am glad to see specific initiatives address these aspects. ”

On Fintech
“Government should do more to encourage fintech/startup ecosystem - and one of the most important ways is to by becoming an early adopter of these solutions.”

Vinay Bagri, CEO and Co-Founder, NiYO
On taxation and benefits
“Very good budget directionally for salaried class. The introduction of standard deduction and rationalization of Medical benefits are commendable steps towards making all interaction between employee and employee digital.”

Sachin Gupta, CEO and Co-Founder, HackerEarth
On employment and education
“The budget’s focus on healthcare and agriculture indicates that it’s largely structured to benefit the rural economy. There are few initiatives that impact corporate India and even fewer aimed at startups. However certain initiatives aimed at employment such as PF contribution by government and talent development through education grants are highly welcome.”

On Digital India
“There is a massive transformation that’s happening across industries primarily led through technologies like AI, IoT, Big Data and others. India has the unique opportunity to drive these innovations for business across the globe but it needs a concerted effort to create skilled talent. The move by the government to focus on these technologies through Digital India is appreciated.”

Bala Parthasarathy, CEO and Co-Founder, MoneyTap
On lending and fintech
“I believe that the 2018 Union Budget would have an overall positive impact on the FinTech and Financial Services sector. It is obviously a complex act to balance multiple factors such as our Fiscal deficit targets (that stayed around 3.2 percent this last year), GDP growth, unemployment rates, boost to our manufacturing sector and all of this in the backdrop of balancing inflation and the recapitalization of PSU Banks.

"The government is giving a strong push to domestic manufacturing, especially with the 372 new business reforms for improving ease of business. This may also show a further rise on consumption side. Both of these factors put together would facilitate a healthy retail Credit growth. It’s possible that a lot of this credit growth may come from the private sector banks, which is a good thing as digital and technology adoption is higher with these banks.

"Some smart phones prices may go up, but with the push on domestic manufacturing and ease of doing businesses, we may see more phone variations coming out in the market across price points. Smartphone penetration will probably continue to see a rise and further help the various Fintech services (such as wallets, lending products, PFM’s etc.) that are built on smartphone apps and mobile protocol stacks.

"The focus on cleaning up balance sheets of over-leveraged PSU banks and resolving NPAs should ease cash flow burdens of these institutions and is a good signal for enabling business growth. This should encourage higher adoption of cost efficient lending practices which is the strength of FinTechs in the lending space. So Fintechs would benefit from this either as direct lending or increased collaboration with banks. On the flip side, the exchequer might also see some spending pressures.

"As the GST adoption picks up and new initiatives around blockchain, ML and AI see R&D spends and adoption from the government as Arun Jaitley pointed out, the technology will start playing an even bigger role in driving cost efficiencies and increasing revenue for BFSI and FinTech players.

"It will be interesting to see how the whole cryptocurrency piece plays out as the govt. has a skeptical view of that.

"Overall, I think the budget is going to give a strong push to our economy in the right direction of technology adoption, higher ease of doing business, enabling consumption and credit growth and making us a more digital savvy society.”