IT companies will find biz boom in FM's initiatives

At a time when Trump’s H-1B visa initiative is bleeding Indian Information Technology company’s fortunes, the Union Budget for 2017-18, has given primacy to its tech innovation for productive social impact.

Besides digital initiatives, the government’s game plan to expand the broadband penetration to more than 1.50 lakh villages, skill initiatives, public cloud and security initiatives will expand IT requirement, both the private and public sector.

As per a recent study, India’s domestic IT spending is estimated to grow at 12.9% to Rs 2,14,012 crore in 2017, helped by government’s push for digital services. Last year, it registered a growth of 12.3% and it was lowest in 2013.

India’s annual foreign exchange earning from IT services export jumped to $54 billion in 2008-09 to $127 billion in 2016. With the passage of Aadhaar Act 2016, the spending on digital (social, mobile, analytics and cloud) by the enterprise and government sectors is expected to grow at 43% to touch Rs 38,522 crore in 2017.

Talking to DH, Microsoft India President Anant Maheshwari said the finance minister has presented a balanced Budget and it is underlined by the continued push to using technology to aid digital economy.

“As India strengthens its position on the global map, the need for skilled youth is crucial. The Budget’s focus on extending market relevant training for the youth and setting up 100 international skill centres across the country, is a positive move,” he said.

Wipro CFO Jatin Dalal lauded the FM for delivering a Budget that is a clear continuation of policy direction. “The thrust on digital economy, deployment of analytics in tax administration and initiatives on cyber security demonstrate the significance of IT among the government’s priorities,” he said.

KPMG Partner and COO-Tax Naveen Aggarwal said the government’s focus to promote digital economy and fund allocation to make that happen is in the right direction to help IT/ITeS companies. “However, the long standing demand of reduction of MAT impacting the IT/ITeS sector has been deferred by the FM for the time being, though with a limited relief of increase in MAT credit period from 10 to 15 years,” he said. IT companies are also expecting expansion in the public cloud services revenue in the country. Public cloud services revenue in India is expected to reach $1.26 billion in 2016, growing by 30.4% year-on-year. Also, the new digital security initiatives will help companies find more business opportunity.

The IT hardware industry body MAIT expressed disappointment on the budget. “It could have brought in consumer premise equipment, personal computers and servers under differential duty which could have had multiplier effect on manufacturing in the country,” MAIT Vice President Nitin Kunkolienker said.