Union Budget 2020 Telecoms and Industry Reactions

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Union Budget 2020 has got mixed set of reactions from various corners of the telecoms and IT industry segments. While industry experts are applauding the government’s efforts towards encouraging digitization and electronics manufacturing in the country, COAI has expressed its dismay over no major announcements for the distressed telecom sector of the country. 

Here are some reactions –

“It is heartening to see that the Government has time and again recognized the significance of electronics manufacturing in today’s economy. The Union Budget’s significant focus on local production of mobile phones, electronics and semiconductor packaging is going to propel the Make in India vision further. We are excited about the detailed scheme, which will follow soon.” – Nipun Marya, Director – Brand Strategy, vivo India.

“We see this budget as a good step in direction to become a $5 trillion dollars economy. As a technology player embedded in India’s technology ecosystem, we welcome the government’s vision to build Data Centre Parks in the country. The government’s focus on enhanced digital connectivity, and focus on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to India’s economy,” said, Vikas Garg, Deputy CFO, Paytm.

“The Union Budget 2020 takes a pragmatic approach to spur sustainable growth by maintaining focus on core aspects of the economy. It’s a progressive budget that lays thrust on the sectors which will enable India’s economic growth. We are excited to know that the government aims to make India a manufacturing destination for mobile phones, electronic components and semiconductors and keenly look forward to a detailed policy for the sector as it can pave the path towards making India a major semiconductor hub in the coming times. We also welcome the budget allocation of Rs. 8000 crores for quantum computing, that can open up a lot of new opportunities and commercial applications in the future. The government’s focus on new-age technologies like Data analytics, IoT and AI and improvement of digital connectivity can help the country achieve its goal of becoming a $5 trillion economy by 2025. Extensive use of these technologies will enable stakeholders across tiers to make faster and more evidence-backed decisions leading to business growth”—Sanjay Gupta, Vice President and India Country Manager, NXP Semiconductors.

“At Asus, we believe that the Union Budget 2020 announcement has covered several pressing issues faced by the economy and is going to bring growth opportunities. All eyes would be on the manufacturing sector, with the FM proposing a scheme to encourage mobile phones, semiconductor packaging, and electronic equipment. The new scheme, Nirvik, is also going to offer respite for exporters, promising to settle refunds for electricity and VAT previously levied. Furthermore, the provision to bring digital connectivity to all public institutions at Gram Panchayat and allocation of INR 6,000Cr to bring fibre to home through BharatNet linking 100,000 Gram Panchayats in FY21 are also welcomed moves.
With India’s rising aspirations reaching the rural locales, internet connectivity will pave the way for connected and smart consumerism. At Asus, we shall be pursuing ways to support the government in enriching India’s economy and traversing through rural India to ensure optimum growth and development. We also look forward to the policy on private players setting up data parks and shall be offering full support with our cutting-edge products and services,” said, Leon Yu, Regional Head, India & South Asia, Asus.

“We welcome the initiatives announced by the honorable Finance Minister to boost the start-up ecosystem. The measures made by the government will encourage fresh investment in the sector because the proposed scheme is set to focus on encouraging the manufacturing of mobile phones and electrical products. The government planned to reveal more of a detailed scheme to boost mobile phone, electronics products in the country and to initiate more of phones and electronics to be Made in India soon. We are glad for this opportunity that the government has taken and it encourages us to scale up our defined mission of connecting40croreIndians,” says, Yogesh Bhatia, Founder, and CEO, Detel.

Manish Sharma, President & CEO, Panasonic India & SA, Chairperson -Electronics & Manufacturing Committee, FICCI; Co-Chair FICCI Energy Storage Committee said, “Our honourable FM’s second Union Budget will help iron out some concerns for the Indian economy related to manufacturing, ease of doing business leading to make in India. From a consumer electronics industry perspective, the decision to encourage domestic manufacturing of mobiles and electronic goods in India is a welcome move while a definitive timeline would have helped further boost the industry sentiments. It is one of the vital steps towards establishing a robust, ecosystem for domestic manufacturing while also giving a boost to exports. With the NIRVIK scheme, the SMEs stand to gain financial stability. We look forward to seamless implementation of this scheme to scale up manufacturing and developing an export hub.

Also, the Government push on enabling technology with regard to development of 5 new smart cities, setting up of data center parks, investment in quantum technology, will help establish India as new age economy. With increased focus of Panasonic on developing smart business solutions, we see a role for ourselves in driving this agenda.”

On Taxation:

“There is a positive outlook towards what the budget brings, particularly with regards to the decisions on simplification of GST filing, extending tax rebates on the personal tax bracket for people with income up to 15 lakhs. With increase in the disposable income, we hope this will drive consumption for the consumer durables industry too which experienced flat growth in this fiscal.

Further reduction in Corporate Tax for existing companies to 22% and for new at 15% and abolishment of dividend distribution tax making India a more attractive destination for investments.”

“When it was announced, the budget hurt the Sensex. In the grip of a slowdown, businesses in India expected a far more pro-business budget. While the budget may not be precisely what the business community wanted, it has several silver linings, especially for the IT sector.

Data centres are at the heart of a modern digital economy; the government’s decision to promote the establishment of data centres in India is a win-win for businesses and consumers. A considerably more significant number of data centres in India will make the economy more competitive globally. Indian IT players will benefit from the building of additional data centres.

The relaxation related to Employee Stock Option Plans is another huge plus. Employees awarded stocks need not pay tax on them for the next five years. Not paying tax on stocks will go a long way in making companies competitive by helping them attract the best talent. Finally taxing dividend when it is in recipients hands will be beneficial to the business,” explained, Ankit Dudhwewala, Founder, SoftwareSuggest & CallHippo.

“The budget has some very positive proposals for the GIS (Geographic Information System) market. There are several areas where the hon’ble Finance Minister has announced allocations of funds which will directly benefit from the use of GIS.

It is heartening to see the allocation of Rs 11,500 Crores in 2020-21 for Jal Jeevan Scheme, this will certainly help in improvement in water resources and providing 24×7 water to households. Also Rs 12,300 allocated to Swatchh Bharat Mission for 2020-21 will help in roll out of initiatives for disposal and processing of solid waste and waste water. These two schemes are very important for the country and GIS can help in the management of water resources, water distribution and in achieving the objectives of Swatchh Bharat mission.

5 new Smart Cities have been announced in collaboration with states, apart from the allocation of Rs Rs 103 lakh Cr for infrastructure in the form of 6500 projects for housing, supply of safe drinking water, clean energy, health care for all. GIS has been supporting the growth of Smart communities and in improvement of liveability of the cities.

GIS was the heart of R-APDRP program that aimed to reduce the power distribution losses by various electric utilities in the country. Now the announcement to make smart metering mandatory by all DISCOMs in the country will bring-in an important reform, the installation and management of smart meters can easily be handled through GIS based systems.

Mapping on land on both sides of railway tracks for generation of solar energy is driven by GIS and so are the other areas like expansion of sea ports, development of Inland Waterway and 100 more airports. It has been announced that the National Gas grid will be expanded from16200Kms to 27000 Kms. GIS is already been used in installation and management of Gas pipelines and distribution; the expansion of Gas grid will create more opportunities for the use of GIS and other geospatial technologies,” said, Agendra Kumar, President, Esri India.

COAI Expresses Dismay

“We welcome the Government’s overarching positive theme for the Budget 2020-21, that includes enabling an aspirational India, through major fundamental structural reforms targeted at fostering healthcare, education, skill development, ensuring economic development for all and further a caring, humane and compassionate society. The Hon’ble Finance Minister Smt. Nirmala Sitharaman, emphasised on country’s growth and Digital inclusion will hinge on advanced technologies such AI, Robotics, Machine Learning, analytics, among others, which essentially relies on telecom infrastructure.

However, while the Union Budget laid major emphasis on boosting domestic manufacturing of network products, mobile phones, electronic equipment, semi-conductors and healthcare products and has allocated INR 27,300 crore for the development of industry and commerce by 2021, it is disappointing that there were no announcements made regarding the rationalisation of levies and taxes currently imposed on the severely distressed telecom sector and telecom infrastructure is not taken into consideration that is going to build out the country. The Budget proposed that the New India will be driven by innovations, AI and computing where data will be the new oil and other significant initiatives such as linking of 1 lakh gram panchayat to the Bharat Net program by this year and an allocation of INR 6,000 crore in this regard, none of our key recommendation appear to have been taken into consideration. A financially healthy and robust telecom sector is imperative to support all these future forward initiatives. It is also disappointing to note that telecom was not given an infrastructure status even though a slew of crucial reforms has been announced on infrastructure. The telecom sector, which is the backbone of the country’s economy, did not receive significant support,” explained, Rajan S Mathews, DG, COAI.


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