Budget 2015 was a mixed bag for IT industry
Amar Babu March 3, 2015To begin with, overall the Budget looks balanced and positive. 'Make in India' has definitely been the central theme of the Union Budget this year, and with the slew of initiatives announced today, the government's efforts to turn India into the next manufacturing hub are moving in the right direction.
While 'Make in India' has occupied all the prominence and is definitely an important goal, the government has a daunting task ahead as factors such as 'skilling India' still continue to deter India's success as a manufacturing destination. On his part, the FM has tried to address this challenge by emphasising on the need for skilled talent, self employment and entrepreneurship through initiatives such as the upgradation of schools, facilitating easy student loans, creating platforms such as Atal Innovation Mission (AIM) to foster a culture of R&D, scientific research and a network of world-class innovation and setting up of national skills council that will allow us to standardise procedures and outcomes across our 31 Sector Skill Councils.
Initiatives such as E-biz portal, setting up of expert committee to prepare draft legislation on pre-existing regulatory mechanism, and a strong thrust on developing infrastructure right from roads, railways, broadband connectivity and power architecture in the country will foster entrepreneurship and will help in 'ease of doing business in India'.
On the positives, we welcome the government's intent to revise the corporate tax from 30 per cent to 25 per cent and introducing a bill to enact a comprehensive new law to address the challenge around black money. This will further stir assurance in the corporate world, encourage foreign investments, make the domestic industry more competitive, and lead to higher growth and employability.
From an IT industry perspective, it is a mixed bag with the inverted duty structure being finally addressed with the removal of SAD on all components. The removal of customs duty on components and concessional structure of 2 per cent without CENVAT credit are positive steps to encourage tablet manufacturing in India. However, what disappoints is that no initiatives have been taken to increase PC manufacturing and promote exports. In this Budget, we might have missed an opportunity to drive 'Make in India' in computers.
From a macro perspective, the Budget is balanced with a healthy focus on infrastructure, universal social security vision, insurance for all, and education among others.
(The author is Managing Director, Lenovo India, and President, MAIT)