Unlocking potential for innovation and Growth
By Anil Chanana
Chief Financial Officer, HCL Technologies
For IT-ITeS sector, the Budget aims to drive growth with the contribution of the sector in employment generation and being an exchange earner for the country acknowledged by the finance minister. The Budget provides a fiscal deficit reduction road map which is encouraging and will contribute to external exchange rate stability. The proposal to reduce the corporate tax rate to 25 per cent over next four year (comparable to other Southeast Asian countries) along with the implementation of GST from April 2016 will make India a competitive place to do business.
The proposal of setting up the Atal Innovation Mission for research and development,the Self Employment and Talent Utilisation (SETU) programme to support all aspects of start-up business combined with reduction in withholding tax rate on royalty will make India an IT innovation hub, providing opportunity to move up in the value chain. Speeding up the National Optical Fibre Network Programme and last-mile communication connectivity will help the sector to move to second tier cities making IT a more inclusive industry.
The Budget is forward-looking and aims at modernising the tax system in the country. It seeks to unlock the capital through bankruptcy, dispute settlement and procurement law reforms while at the same time providing for liberal regime for raising capital and incubation facilities. The Budget focuses on making doing business easier by allowing more time (12 months instead of six months) to avail of input service tax credit, online service tax registration and moving towards digital record keeping.