Standing in for his ailing comrade Arun Jaitley, Piyush Goyal presented an Interim Budget for 2019 in the Parliament. Given that this was to be the last budget to be presented by the current NDA government before the country goes to elections, Goyal made it a point to utilise the opportunity to the fullest. There were a number of key measures announced for the upliftment of India’s farmers and marginalised workers, along with a very welcome tax relaxation to India’s middle class.
But apart from the more populist moves that were expected from an election year budget, Goyal made it a point to balance the populism with fiscal prudence. There was a huge talk of technology in the budget and that got the industry really excited. While there were a number of highlights that are worth praising in the interim budget given its limited scope policy-wise, some disappointments still loom large.
HITS
Digital India, e-tax returns, National Policy on AI
Digital India
Digital India has been PM Modi’s pet project to give India a more modern appeal globally and to make several processes domestically more transparent than they’ve ever been. Ever since he announced his will to digitise India in 2014, it was met with mixed reactions and there was a lot of talk especially in the last couple years around if the initiative has been a hit at all.
In a revival of sorts, Piyush Goyal announced a number of key initiatives that is expected to bolster the bid of Digital India going forward. One of the biggest announcements under this was building of 1000,000 digital villages across remote areas of India in the next five years. This will be achieved by expanding and developing India’s existing Common Service Centers (CSCs), which are delivery and access points for various e-services from the central government, state governments and private sector companies to rural villages. These services include banking, education, health services, passport registration, as well as booking train tickets and submitting forms and bills.
To establish these digital villages, the CSCs will be developing more services and creating digital infrastructure, including connectivity. Six villages have already been slated for this initiative, which will see WiFi hotspots, small manufacturing units, solar lighting facilities, LED assembling units, and sanitary napkin dispensers being set up to generate employment.
“We welcome the decision to make 1 lakh villages digital in the next 5 years. This combined with Jan Dhan, Aadhaar mobile, and direct benefit transfer will be game changers for realizing the benefit of technology in delivering better governance,” said Anand Raghute, MD, Innowave IT Infrastructures. He further added that “potential rolling out of NTP (National Telecom Policy) 2018 will further enhance telecom operated citizen services.”
“The focus on the Digitisation will go a long way in improving the social and economic fabric of the country – be it creation of jobs, uplifting the lower end of the society reducing the income gap and many more. The announcing of the 1 Lakh Digital Villages is really welcome. It will go a long way to leverage the benefits of technology right up to the grass root level. Especially in a country like India which has always been challenged from a penetration of technology this will be a big boost,” said Prashanth G J, CEO, TechnoBind.
e-Tax Filing
The NDA government’s major agenda since taking office in 2014 has been to formalise the Indian economy and increase the number of tax payers. Estimates suggest that in FY2018, there was a 26 per cent rise in the number of income tax returns filed compared to FY2017, effectively adding 9.95 million new income tax payers. So, one could say that the central government has been successful in increasing the tax payer pool of India.
However, it is not too old in history that tax payers had to go through a number of tedious procedures to pay their taxes and it became quite evident that now that we are witnessing an increase in the number of people filing their taxes, our old system had to go away for good.
“The Finance Minister’s statement that the government has now approved a technology-intensive project to transform the Income Tax Department into a more assessee-friendly one is music to ears. It is proposed that returns will be processed within 24 hours and issued simultaneously. If the government is able to achieve this for corporate tax payers, on the lines of individual tax payers, it would be a giant leap forward in digital tax administration,” EY India’s Rahul Patni wrote in a blog post.
With electronic filings and tax administrations in India, there has been a fundamental shift from quantity to quality. Corporates need to focus on quality of data being generated and consumed in tax filings and submissions.
National Program on Artificial Intelligence
Goyal’s speech in the Lok Sabha was met with vivacious thumps on the desk and what attracted the most attraction was the announcement of national program on artificial intelligence. “India has become the second largest startup hub of the world. We are proud of the hard work and innovative ideas of our youth in this sector. A national programme on AI has been envisaged by the Govt. This should be catalysed by the national centre for Artificial Intelligence as a hub, along with other centres of excellence,” Goyal said.
Artificial Intelligence has been among the hottest topics in the tech world and more and more organisations are taking a look at the technology to reap the massive benefits that it promises. Goyal’s announcement of a national policy on the technology comes at a wonderful time as the technology can give a huge impetus to India’s industries along with creating a lot of employment as well.
“The step to create a portal on artificial intelligence will help the common man to understand the importance of AI. Data is the backbone of AI. Currently, there is a lack of structured data availability in India. Having said that, this doesn’t look infeasible at all and timing couldn’t be better than this to launch a nationwide AI center,” said Varun Rathi, COO and Co-Founder, Happay.
Apart from offering several key advantages to tech related industries, there are other industries that can benefit from a solid AI network in India as well. “The idea of launching a program on Artificial Intelligence has got far reaching consequences in the fields of Agriculture, Health care, Education, Banking & Economy and Homeland security & Military that are very critical for growth of the nation. India can take full advantage of rapidly advancing AI & machine learning fields and availability of AI Architects in India to take its digital initiatives far beyond the imagination. It will take the envelope to the next level in continuation with the rolling out of smart cities and currently undertaken programs to implement blockchain by some state governments,” said Kapil Sharma, Chief Sales Officer, Collabera.
MISSES
Electric Vehicles, Renewable Energy
Electric Vehicles
Ever since India has emerged as an important nation in the Paris Climate Accord, there has been a need to cut back on our carbon footprint. A big way to do that would be to popularise electric vehicles by means of a state subsidy. However, while a lot was expected from this year’s budget, the FM found it hard to accommodate electric vehicles in the interim budget. Although he did say that “making India a pollution free nation with green Mother Earth and blue skies is the Third Dimension of our Vision. This India will drive on Electric Vehicles with Renewables becoming a major source of energy supply. India will lead the world in the transport revolution through electric vehicles and energy storage devices, bringing down import dependence and ensuring energy security for our people.”
However, for the EV industry, this was simply not enough. This has been an industry that has desperately waited for the government to incentivise electric mobility and they had to go home empty handed yet again. For a majority of the industry, it was all talk and no show, and there was a sense of lack of concreteness from the government.
“We hope the government would soon announce a concrete plan of action with its time-bound implementation in order to fulfil its stated vision. Since no substantial schemes were announced on electric vehicles in the budget, we expect that the government would announce specific action plans to reach the 1st one million electric vehicles on the road by 2021,” said Sohinder Gill, Director General- Society of Manufacturers of Electric Vehicles.
“Considering the environment concerns we were hoping for something concrete in the 2019 budget. Moreover to meet the target of 2030 the government needs to plan today instead of giving the electric vehicles a push at a later stage,” said Ayush Lohia, CEO, Lohia Industries.
Renewable Energy
2018 was a tumultuous year for India’s renewable energy industry, especially the solar sector. The safeguard duty imposed on the solar sector in the middle of the year threw the entire industry into jeopardy. The industry went in legal battles against the move and that delayed projects and eventually increased the cost of ongoing solar projects.
Cancellation of many auctions by state agencies also hampered the confidence of project developers in the government. Amid such uncertain times, the industry was waiting for the NDA-government’s last budget before the Lok Sabha polls, anticipating some big bang announcements for the sector. However, there was really no mention at all of the industry and they have to wait for the next full budget hoping for some clarity from the government.
“Budgetary allocation for MNRE remains approximately similar to capital allocated in FY 2017-18, standing at Rs 5,200 crore. Unfortunately, the government did not act upon the Parliamentary Standing Committee recommendation of reinstating the funding of renewable energy projects through National Clean Energy Fund, which was diverted towards GST compensation fund since 2017,” said Amit Gupta, Director, Vikram Solar.
Goyal said that India’s solar generation capacity has increased by over ten times in the last five years. However, under the current uncertainties, it would be interesting to see if India would be able to meet its target of 175 GW of renewable energy by 2022.
