Here are some IT industry experts commenting their feedback on Union Budget 2021.
Avinash Gupta, Managing Director Dun & Bradstreet, India says:
“The government’s commitment to revive economic growth is clear through the measures announced in the Union Budget. Building on the six pillars, the union budget has unveiled many unique initiatives such as setting up of a professionally managed Development Financial Institution (DFI), establishment of an asset reconstruction and management company, development of a Fin-Tech hub and transition to digital census, etc. I find five notable initiatives, out of many positives.
One, setting up of a DFI and providing additional capital infusion of Rs 200 bn in public sector banks is expected to address the legacy issues of the banking sector. Further, proposal to strengthen the NCLT framework is expected to uplift overall investor confidence. Two, increasing the threshold of paid-up capital and turnover for small companies, increasing the turnover threshold levels for mandatory audits, decriminalization of the LLP Act 2008, and relaxations in setting up one person companies solidifies the agenda of improving ease of doing business. Three, proposed use of Data Analytics, Artificial Intelligence and Machine Learning, and the inclusion of additional modules such as e-scrutiny, e-Adjudication, etc. in the MCA-21 database is a step in the right direction of strengthening corporate governance. Four, proposal to privatize all central public sector enterprises in non-strategic sectors and monetization of non-core assets will improve the overall capital allocation in the economy. Five, an increase in the foreign direct investment levels in the insurance sector will provide insurance companies with the much-needed capital to drive insurance penetration which is currently much lower than the global average.
On a cautious note, I think the borrowing programme needs to be properly executed to avoid a funds squeeze for domestic companies and that the privatization target should be implemented with conviction and haste”.
Rajesh Nambiar, Chairman and Managing Director for India, Cognizant
“Coming as it does during an unprecedented global crisis, the Union Budget for 2021 is justifiably focused on resetting the Indian economy and enabling it to emerge from the shadows of a prolonged and unforeseen disruption. The accent on improving healthcare, manufacturing and infrastructure as part of India’s mission to drive greater self-reliance will not only create more employment opportunities, but also accelerate the country’s shift towards digital modernisation and transformation that have become a key competitive differentiator in the new normal for businesses and governments alike.
Measures such as establishing a world-class fintech hub, and further incentivising start-ups will provide impetus to innovation, entrepreneurship and R&D in the country. Providing financial and tax audit incentives to promote digital transactions is a progressive step that will result in greater transparency and reduced compliance burden.
Consistent with India’s towering role in today’s knowledge economy, initiatives such as broadening foreign academic collaborations, leveraging synergies between various research institutions, universities, and colleges across India, amending the Apprenticeship Act to provide enhanced post-education apprenticeship and training opportunities to graduates, and moving towards implementing a Higher Education Commission of India will help enhance the quality of education as well as the vocational and industry skills available in the country. The proposed National Digital Educational Architecture is a welcome move to encourage a digital-first mind-set across the country’s education ecosystem for it to reinvent itself and rise to the learning and employability needs of the digital era.
Leaving the tax rates alone signals a stable tax environment. Reducing the time limit for re-opening of assessment to three years, setting up a faceless income tax appellate tribunal, and strengthening the NCLT with e-Courts and a conciliation mechanism for contractual disputes will increase corporate and investor confidence by paving the way to greater transparency and expeditious action.
There isn’t much in the budget for the IT industry, a sector that has done outstanding work to keep essential services rolling in various parts of the world through immensely difficult circumstances. We were hoping for an announcement related to the easing of SEZ rules for the IT industry.”