Union Budget 2017, Industry Expert Recommendations

Greytip Software

Mr. Girish Rowjee, Co-founder & CEO, Greytip Software, a people management software company serving SME customers, shared his view on the Union Budget.

• The direct tax rate is to be reduced and /or deductions to be increased. Since the government would want to spur spending and because of demonetisation spending in certain sectors has slowed down, we expect the government to lower the tax rate as well.

• This will put more money in the hands of employees and individuals which we believe will help spur spending and lead to a positive effect on the economy.

• Also with the GST coming in, we may also see certain changes in the IT industry where the IT industries like us will get rationalised. If you see, we are paying two types of taxes one being the service tax and the other is the VAT

• With respect to GST being rolled out, there will be a lot of rationalization of tax especially for the IT industry which would help us significantly.

• We are expecting that the rate of taxes on domestic software & IT services are brought down as this will help lower costs of these items and lead to increased adoption. This will have a significant impact in helping the Govt. achieve is a vision of a Digital India.

• The government may also bring in more stress on the insurance schemes. Like for instance, they may bring more variation on the NPS schemes as the PF rates are coming down and the NPS plans are pushed through.

• We expect the Govt. to take special steps to augment or help develop specific skills which will now be needed as a large segment of the population is moving online.

    Focusing on Demonetization

• Due to demonetization and the stress on a less-cash economy, a large number of transactions will move online. In 2017 budget this will be further supported by the government which is definitely a benefit for the IT industry as they can now provide new and innovative solutions to help businesses and individuals in this process.

• Since demonetization is not restricted to just the cities, businesses and individuals in the smaller cities would also need to adopt various IT / IT enabled services. This will lead to opening up the market (which is now generally restricted to the larger) to the Tier –II and Tier-III cities also.

• Along with the prospect of providing the solutions, the IT Industry would also need to figure out how to help first-time business IT adopters to move to these solutions. In addition to the DeMo announcement, there have also been directives from the PF Department and Labour Commissioners asking businesses to pay their employees through Bank Transfers and cheques.

• This coupled with other announcements regarding increasing in ESI Wage limit, etc. would mean that the compliance requirements of organizations would increase. So at Greytip, we see this, an opportunity to help small businesses in big and small cities be compliant and reduce the time and effort that they would need to spend to achieve this.

• This is in addition to ensuring that all the calculations are done accurately and as per the latest laws and amendments. This being the situation, the IT sector will play a critical role going forward in helping businesses adapt to the new reality.

• Since we will be getting on to online transaction and operations online, the infrastructure in these platforms has to be improved and changed. Availability of electricity, telecom infrastructure, internet & broadband, smartphones & digital literacy are very important aspects that need to be accessible to everybody and the government needs to address these issues. We also feel that the Govt. laying stress on improving digital literacy would help larger segments of the population move online.

• If these amenities are fulfilled by the government then service providers like us can make use of this infrastructure, build and cater solutions for everybody.

Su-Kam

Inputs on Union Budget shared by Mr. Sanjeev Saini –Director (Technical), Su-Kam,  a power solutions provider.

• India is facing a void in demand – supply gap in energy, it is important to tap the solar potential to meet the energy needs. So, from this budget solar power industry expects that theGovernment should provide benefits in such a way that we can achieve the target of 40GW rooftop solar by the end of 2022.

• At the moment we have achieved about 1GW and thus to obtain the desired goal we need to go with at least 40X speed in the next 5 years. The government should also work towards providing more benefits to the individual rs and end-users in terms of tax rebate etc. to encourage them to switch to solar power back-up systems.

• The Solar power equipment (like solar inverters, UPS, charge controllers) should be brought under “zero” VAT/CST regime similar to solar panels, all across the country.

• Further, we hope that the Retail lending facility through commercial banks for buying solar energy equipment should be made as easy as getting a consumer loan, in fact, solar energy sector should be given priority lending status. The interest paid on loans used for solar energy systems should be allowed as a deduction from income while arriving (at) income tax for individual taxpayers as well.

• The use of solar energy must be made mandatory for new construction through building by-law. We hope that the RPO should be implemented strictly by imposing penalties on non-implementation. All forms of tax, including CST, VAT and service tax should be waived off on the grid connected and off grid solar energy projects using the indigenously manufactured system for a period of five years.