Budget 2014 Promotes Domestic Emphasis on Telecom

Domestic Focus

Even though the industry bodies were looking forward to having a clear direction towards transparent spectrum policies and simplification of taxation issues in telecom, the first budget from the ‘Modi Sarkar’ has been warmly welcomed by the industry players. TelecomDrive.com is bringing some of the reactions from various corners of the telecom ecosystem.

Pardeep Jain, Managing Director, Karbonn

“With the announcement of progressive measures aimed to strengthen domestic production, the first budget of new government is quite impressive and serves the purpose of strengthening the consumer electronics industry in India. The budget is geared towards developing a robust manufacturing infrastructure in the country. This budget promotes domestic manufacturing, which will help bring greater prosperity to Indian economy and help in creating immense job opportunities in the country. The Finance Minister has also proposed greater FDI into the economy that will boost up the domestic production.

However, viewing the forward-looking policies, we welcome the Union Budget as it will help elevate industry sentiments and will advance domestic manufacturing to balance the mobile phone market in the country.”

Sunil Lalvani, MD, BlackBerry, India

“The budget is prudent and cautious even while it aims to address key sectoral concerns and brings in vital initiatives to spur growth especially in critical sectors like manufacturing, healthcare, education, skill development and infrastructure as well as assuring a stable tax and regulatory regime that is expected to incentivize investments. The budget also has significant focus in rolling out measures for rural development. From a consumer sentiment standpoint, the budget brings some relief around IT exemptions and is expected to accelerate savings that may fuel economic growth and consumer spending. Further impetus to innovation, entrepreneurship and focused development of industrial corridors will drive domestic employment generation and economic upliftment. Fostering growth and reducing fiscal deficit have been the cornerstone for this year’s budget.

With technology as a key component for delivery of government services, mobile will be a key enabler. M2M technologies will be vital to realize the governments vision of 100 smart cities, as well enhancing the delivery of healthcare and education services. We believe these are positive signs that will transform the standard of healthcare, education and urban living, as IoT becomes a reality.

Further, domestic manufacturing will receive likely boost as the government enhances focus on this sector. Overall a progressive budget that aims to instill investor confidence and propel economic growth”

Sunil Khanna, President and Managing Director, Emerson Network Power in India

“Emerson Network Power believes that this has been a pro-industry budget and the proposal to develop 15000 kms of new gas pipelines through PPP will spur growth. Additionally, allocation of funds to create solar power projects across states will help in alleviating the power crisis in the country. Understandably, the focus on implementing the Green Energy Corridor Project will help boost power generation from renewable energy sources. The government’s commitment of providing electricity 24×7 for all households will provide an impetus on maximizing power utilization with increased efforts on harnessing alternate energy sources and bringing back focus on manufacturing. We are confident that the initiative to enhance broadband connectivity in villages should help in creating more digital infrastructure and this will also benefit small and medium businesses as well as restore confidence in the public with the shift towards e-governance models.”

Vivek Varshney, Vice President & Global Head Telecom Practice at UST Global

“We feel that the new government has presented a progressive budget, which will help in creating an investor friendly environment and attract more foreign and domestic investment in the Telecom sector.  Allowing FDI in telecom will attract more investment across functional technology areas like 4G and WiFi enablement of cities, railway stations and trains will create more opportunities for telecom solution providers like UST Global. Another key highlight of the budget is the creation of rural broadband vision which will allow telecom companies to be a part of inclusive growth and improve the penetration of technologies to rural households, thereby improving the living standards of the citizens. Government earmarking Rs 7,060 crore in this financial year for developing 100 smart cities in the country would also help create communication infrastructure.”

Jaideep Mehta, VP and General Manager, IDC South Asia

IDC welcomes the Union Budget as a positive step forward in the government’s efforts to revive the economy and promote economic growth. The emphasis on the infrastructure and manufacturing sectors is particularly welcome as these are foundational for a nation at India’s stage of economic growth. From a technology sector perspective, the budget has several proposals which are positive:

The outlay of Rs. 7060 Crores on Smart Cities will not just push the frontier of urbanisation in India but also create a new set of markets for tech players across the industry spectrum. We estimate a minimum of Rs. 2,000 Crores flowing into the technology sector on the back of this initiative.

•The e-governance program to inter-link all ministries and departments is welcomed. India urgently needs to improve the efficiency of government functioning. While the details are yet to be made available, this initiative is likely to yield several hundred crores of revenue to the IT industry.

•New employment and wealth creation opportunities will abound in the start up eco-system with the Rs. 10,000 Crore fund created to boost start ups and SMEs.

•Banking and Manufacturing are the two main sectors for the IT industry. The slew of measures announced to strengthen and expand both these sectors is welcome news and will encourage IT consumption, which together constitute 40% of the market,  over the next 12-18 months. An addition of even 5% of IT spending growth here means a boost of Rs. 1000 Crores for industry.

•The duty reduction (from  4% to 0%) on imported PC components will give local electronics and computer manufacturing a boost; with the electronics import bill expected to exceed the oil import bill by 2025-2028, such measures are urgently needed. The net addition to the manufacturing base, job creation and cheaper PCs are all excellent outcomes of this budget proposal.

•However, the education cess on imported electronics, including PCs and Smartphones, will challenge consumption growth as it will increase street prices.

•The spread of the Internet to rural areas will greatly enhance the quality of life for the communities. In this context, we welcome the National Rural Internet and Technology Mission with the fund allocation of Rs. 500 Crores. Over time, this will boost both the IT and the ecommerce sectors.

There are a slew of proposals which will have a positive impact on the IT industry. It is a great start and we look forward to the government implement these proposals.”

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