IT cos find biz opportunities in govt technology adoption

Indian information technology (IT) companies are buoyed by the Union Budget 2016-17 plan to give emphasis to IT on a large scale for income tax filing/litigation, citizen-centric service delivery, agriculture and skill development.

Besides giving emphasis on building digital literacy massively, the government is planning to make the IT adoption in a bigger way across SMBs, land record modernisation, Aadhaar adoption, procurement platforms, etc.

Nasscom President R Chandrashekhar said this is an opportune time for Indian IT companies. “Linking social security benefits to Aadhaar will plug leakages and increase efficiency. Also, the government’s decision to start 1,500 multi-skill centres is a good beginning to enhance IT skills through out the country. We would urge the government to move forward at a swift pace and build an effective PPP model,” he said.

Tata Consultancy Services CEO N Chandrasekaran said the extension of the SEZ scheme till 2020 and reduced tax at 10 per cent for global revenues generated by India-registered IPR will further energise IT companies and entrepreneurship.

“Jaitley has announced a slew of digital platforms to connect farmers with their ecosystem. This is a very comprehensive technology-led plan that will significantly bootstrap the Indian heartland into the digital age,” he said.

Wipro CFO Jatin Dalal said the Finance Minister has balanced the investment needs of a growth economy with commitments on fiscal discipline. “The Budget focuses on investment in infrastructure and social sectors, while attempting to widen the tax base. The measures announced for the rural economy should boost productivity and incomes leading to growth in consumption,” he said. “I applaud the efforts to increase the use of technology in e-governance, as well as steps taken towards digital Inclusion. I welcome the special patent regime which will encourage research and lead to generation of intellectual property in India,” he said.

“The government focus on bringing Aadhaar framework through Social Security Platform would require technology support, and we have the capabilities as well,” IESA President M N Vidyashankar told Deccan Herald. “The entire transformation of citizenship identity to a uniform platform has brought lots of cheer to the IT ecosystem. The government’s focus on agriculture will bring an accelerated pace to the growth of tech companies,” he said.

Recently, Infosys has bagged a Rs 1,380-crore contract from the Centre to build technology infrastructure for Goods and Services Tax Network (GSTN). 

FreeCharge COO Govind Rajan said the government’s proposal to automate three lakh fair price shops is a great step towards the overall Digital This move will further open up the scope for automation of payments at fair price shops by embracing new forms of digital payments like wallets,” he said.

Labour analysts say the decision to extend Section 80 JJAA will help IT sector. The provision gives rebates to the company for paying additional wages to new regular workmen employed during the previous three years.

According to a recent survey, total revenue (exports and domestic) of the Indian IT-BPM sector for 2015-16 is expected to touch $143 billion, registering a growth of 8.3 per cent over the previous year. But the IDC survey cautions that due to the growing economic slump in global spending on IT, which has grown by about 5% or 6% consistently for the last five years, is due to grow by only 2%.

Besides dual levies on software products, analysts find that the budget did not address transfer pricing issues related to safe harbour margins and APA roll back rules.