Finance Minister P. Chidambaram’s Interim Budget for the fiscal year 2014-2015 on one hand failed to impress the common man of the country and the IT industry as a whole but on the other hand IT Association MAIT welcomes the budget with open arms.
Welcoming the interim budget announced by Chidambaram on Monday Manufacturer’s Association for Information Technology (MAIT ), welcomes Finance Minister’s vision for the future for promoting manufacturing that has proposed certain measures like minimum tariffs protection.
Sumit Goswami, CEO, Keypoint Technologies feels, “We welcome the announcement of restructuring the excise duties on mobile handsets to six percent for all categories. This move will surely encourage the domestic production of mobile handsets and will offer a greater boost to develop the domestic mobile capabilities.”
“We look towards this announcement as a positive policy measure as greater domestic production will create a positive demand for localized content, which will drive the local content generation on smart devices towards an optimistic future. The local content generation on smart devices will definitely receive a great impetus with this announcement as an expected reduction in mobile handset prices will lead to a greater penetration of mobile services into the interiors of the country thus leading to a greater demand of local language apps. As device UI is an integral part of the mobile technology of today, we expect that greater penetration of mobile devices in the country will drive a positive demand for localization and regional content,” he adds.
Neutral with the budget, L. Ashok, Director, Futurenet says, “The budget was just normal and has nothing major for IT industry. There is nothing for the System Integrator to feel good about it. It is very different and hasn’t done anything major to change the phase of IT industry.”
Agreeing with Ashok, Devesh Aggarwal, CEO, Compusoft opines, “I don’t think there has been much change in the IT industry with the budget. Hardware industry might have got some good news but from the software perspective there is no change and will not effect at all.”
D.K. Bajaj, Director, D.M. System says, “The budget has not brought any good news for the IT industry. It’s just the laptops which prices have been reduced which will not give any advantage to the industry. despite knowing about the fact that the industry is down, FM should have done anything or at least should have reduced the double tax to give respite to us.”
Faisal Hussain, Global CEO and Founder, Synechron shares, “Despite the lack of key reform legislations, the interim union budget 2014-15, focuses on some significant growth areas and continued fiscal discipline. The government has done well to provide thrust to automobiles, energy, infrastructure education, and agriculture sector but it has left a lot to be desired for the IT services and software sector. The reduction in excise duty from 12% to 10% for mobile phones and consumer durables in particular has been encouraging. Additionally, the ongoing implementation of industrial corridors in key regions is an optimistic trend as is the Rs200 Crores venture capital fund announced for SC entrepreneurs. We believe that both these will help catapult India’s stature in its innovation credentials by creating a robust infrastructure and external ecosystem. We believe the time is apt to take economic reforms to the next level which is now extremely important if we need to control our fiscal deficit and arrest the downward spiral of GDP growth.”
Highlights of the Budget
Reduction of excise duty on all goods falling under chapter 84 and chapter 85, including computers from 12% to 10%.
ED restructuring to spur domestic production of mobile handsets:
Domestic manufacturers of mobile handsets will be allowed to pay an Excise Duty of 1% in case CENVAT on inputs and capital goods used for manufacturing is not availed.
For all imported mobile handsets, the CVD now is 6%.
Since the above measures are effective only upto 30-06-2014, it remains to be seen whether the same will be continued beyond that date by the new Government.
A proposal for Rs.1000 crore transfer to the NSD (National Skills Development) Trust for skill development is also laudatory, which will go a long way in employment generation.
Further, the proposal to make an initial contribution of Rs.100 crore to the corpus of the Ministry of MSME’s “India Inclusive Innovation Fund” will immensely benefit the grassroot innovations in the small sector.