Budget 2016: Industry Supports Big Steps for Small Entrepreneurs, Making India Investment Friendly Destination

With the union budget announcements, the industry has shown its support to the government’s initiative of creating a favorable environment for making investments in India and also towards encouraging development of small entrepreneurs and innovation in India.

Sudhin Mathur, Director- Smartphone Business, Lenovo Mobile Business Group (MBG).

“The Union Budget for FY 2016-17 is a big step in terms of aiding the common man, small entrepreneurs and companies looking to invest in India. Ease of doing business and financial sector reforms being two of the nine pillars that the Government will look towards to transform India, is a welcome move. In addition to this, the rationalisation of custom duties and excise duties for raw materials, manufacturing for the IT and Hardware sector apart from various sectors to boost the Government’s ‘Make In India’ sector are definitely going to boost the manufacturing sector and lower costs for firms looking to do business in India. Passing on duty differential benefits to components and accessories that go into manufacturing of phones is clearly an extension of promoting Make-in-India. It should also help built the domestic component ecosystem in the long term. But till a competitive supplier base is established in India, there may be a marginal increase in cost of the box due to higher cost of accessories.”

Pardeep Jain, Managing Director- Karbonn Mobiles.

“With Karbonn’s focus on indigenous manufacturing employing local manpower and skilling them, we are very happy to be an active contributor to the government’s Skill India initiative. However, the withdrawal of BCD, CVD and SAD exemption on mobile phone chargers, adapter, battery, wired headsets and speakers for actual manufacturing is disheartening and is likely to stifle the growth of Indian Smartphone players and impact their price competitiveness. The parts and components ecosystem in the country is still in its nascent stage. While the incentives on local manufacturing announced in the previous budget were welcoming, government should have allowed for a gestation period for local handset players to strengthen their manufacturing capabilities before withdrawing tax exemptions on completely built units’’

Mahesh Lingareddy, Founder & Chairman, Smartron.

“To boost the morale of entrepreneurs, the capital gain tax could have been exempted for investment in upcoming industries. Keeping in mind the employees of an organisation, the taxes should have been deferred for the Employee Stock Option Plan (ESOP) who buy the vested stocks. Also, the taxes should have been waived for five years for start-ups on a revenue of 1000 cr rather than 25 cr.”

Pramod Saxena, Chaiman & MD, Oxigen Services.

“We are happy with the general direction of the budget as it lays emphasis on development of the rural sector, digitisation and reforms in banking. The digital literacy mission that has been announced which will target 6 crore households with financial literacy, with this the digital connect and payments connect will play an important role. Also, statutory status to Aadhaar will play a very big role in promoting digital payments, social benefit transfers and allowing several services beyond banking & insurance to be also be brought into its fold, whether it is government subsidies or government payments it will open a way for more government payments and subsidies to flow into the financial inclusion program.”

Suneet Singh Tuli, CEO, DataWind.

“We’re pleased with the broad expansion of the social net for those at the bottom of the pyramid. Such support via healthcare, employment and skills development is broadly acknowledged as a means of poverty alleviation. We applaud the government for the move towards organic farming and the general support for farmers, which will not only support environmental sustainability but strengthen the rural backbone of the country. The digital literacy scheme for rural households is a key element of these activities and can play a significant role in their successful implementation”.

Bhavin Turakhia – CEO and Cofounder, Directi.

“This budget signifies correcting and working towards some basic priorities in terms of providing more power and support to our internal growth engine. The government has shown a clear intent on revitalizing agriculture, infrastructure, skill development and higher education sectors. This bodes well for creating a highly skilled labour force to drive the ‘Make in India’ mission in the country.

The deployment of Massive Open Online Courses to promote Entrepreneurship Education and Training will help Indian youth connect with mentors and credit markets. It is an encouraging move aimed at promoting entrepreneurial spirit, especially among youth from rural areas.

Amendments in the Companies Act and the ‘Stand up India’ scheme will boost the entrepreneurial ecosystem. Most importantly, the government has indeed offered unique opportunities to Start-ups, categorizing them as critical partners to the ‘Make in India’ programme. The proposed 100% tax deduction for new startups for the first 3 years, along with the speedy registration mechanism is quite noteworthy.”