Indian Finance Minister Arun Jaitley presented his budget for the year 2017, yesterday. As was expected, the budget encourages digital transactions with an outlook on a digitized economy. The Finance Minister in his speech said that the digital payment infrastructure and grievance handling mechanisms will be strengthened. The focus would be on rural and semi-urban areas through Post Offices, Fair Price Shops and Banking Correspondents. And, steps would be taken to promote and possibly mandate petrol pumps, municipalities, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including BHIM App.
Jaitley also said that a shift to digital payments has huge benefits for the common man. “Already there is evidence of increased digital transactions. BHIM app will unleash the power of mobile phones for digital payments and financial inclusion. 125 lakh people have adopted the BHIM app so far.”
He further said that increased digital transactions will enable small and micro enterprises to access formal credit.
AdAge India brings to its readers post-budget reactions of some of the top executives in the industry.
Vivek Bhargava, CEO, DAN Performance Group, who thinks it is a good budget overall and an extremely positive one for the digital industry said, “The strong focus on promoting a digital economy through various initiatives on the digital payments front will give a great impetus to the digital revolution that the country is currently undergoing. We are witnessing a significant increase in digital transactions owing to the cashless movement already, which is a huge indication of the times to come – largely in the benefit of the common man. It’s encouraging to see the government introduce movements like ‘Digi-gaav’ and others which will take digital technology to the rural areas where most of the country’s population is actually based.”
Manoj Gupta, Co- founder, Craftsvilla, who was a bit disappointed with the budget, said, “There is nothing big bang in this Union Budget. There is very little for startups and ecommerce. Abolition of FIPB would hopefully make FDI easier. I was looking forward for the Government to take more pro-active actions on areas like handloom and tourism that have huge potential for India. I would have also loved it if they announced developing handloom parks or heritage parks across the country with better facilities."
Ahmed Naqvi, CEO and Co-founder, Gozoop said, “With an added impetus on transparency and Digital in the proposed budget, I see the Advertising industry, especially the Digital Marketing component, getting a boost and growing faster than earlier anticipated. For MSME’s the 50Cr cap for reduction in corporate tax from 30% to 25% will make emerging Advertising agencies looking for a potential alignment with the larger networks to have a keener focus on the retainer business as compared to the media business for maximum efficiency. We foresee a greater push towards Housing, Infra and Rural. Marketing agencies will definitely benefit as brands of these sectors look to aggressively reach out to their audiences.”
Abhesh Verma, COO, nexGTv, opined, “I appreciate the clear commitment shown by the Government towards fueling the growth of digital adaptation by focusing on underlying infrastructure. This is reflected in the availability of more spectrums and 10k crore worth of budget allocation for fiber optic laying beyond the already laid 155000 km. The availability of bandwidth will help Indians adapt to the digital lifestyle and thus, will help in the growth of the entire ecosystem. Additionally, the rebate in tax for people, especially the ones at the bottom of the pyramid will increase their in-hand disposable income a part which will also be spent on mobility, data, and entertainment, further working for the benefit of the OTT players."
Sanjay Sethi, CEO & Co-founder, ShopClues, commented, “Budget was overall a populist budget; a move in the right direction but short of expectations. Push for Digital transformation & financial inclusion is applauded but the government has deployed lot more sticks rather than carrots too to push the “less-cash” agenda. I would have expected zero TDR for small value digital transitions. Investments in infrastructure, focus on Bharat & employment guarantee & women empowerment, political trans is welcome. Corporate tax break for SMES is very nice, and much awaited, it is important that Government recognizes SMES to be the engine of India’s GDP growth. Incentive for Startup fell short of expectations.”
Mayank Bhangadia, CEO and Co-Founder, Roposo added, "The government's efforts to digitize India and promote digital payments should go a long way in boosting the country's economic growth. However, the 5% corporate tax reduction is not relevant to most startups that have not yet begun generating as much revenue. Government should now start thinking about how to reduce startups' real cost in the early years. In my opinion, income tax slabs should be made completely flat. Tax rates should not increase with increasing income."
The Indian Broadcasting Foundation (IBF) commended the efforts put by the Finance Minister in presenting a reform-oriented budget mainly focused on Rural, Social and Infrastructure sectors.
The massive thrust on Infrastructure sector in general, and on the social and rural sector in particular, will go a long way in generating additional income and employment. This, hopefully, will provide direct and indirect impetus on the growth of the Broadcasting sector through enhanced spends on advertisement. The 5% tax relief provided to the MSME companies is also a step in the right direction, IBF said,
Punit Goenka, President, IBF commented, “India is on the threshold of scripting a successful growth story. It is already the world’s fastest growing economy. The Union Budget presented by Finance Minister will help in consolidating the benefits of this unfolding economic regime while hailing the Budget proposals and describing it as a transparent instrument for prudent fiscal management. He was also hopeful that some of the specific proposals and concerns raised by the broadcasters in its pre-budget memorandum are addressed soon by Hon’ble FM.”
Naveen Aggarwal, Partner- Tax, KPMG in India said, “Similar to last 2 years, the Budget did not bring much respite or specific announcements benefiting M&E industry. While the expectation of overall reduction in corporate tax rate and abolition of MAT was given a miss, the proposal to reduce corporate tax rate for MSMEs to 25% (having turnover upto INR 50 Crs.) and increasing the MAT credit entitlement (from 10 to 15 years) is a welcome move and will benefit medium scale service companies in M&E sector. While the announcement to abolish FIPB in light of successful e-governance was surprising, further liberalization in FDI policy will be keenly watched in context of M&E industry. Lastly, the FM provided much needed assurance on roll-out of GST as per schedule, confirming GST council finalizing majority of its recommendations.
M K Anand, MD & CEO, Times Network, said, “After the recent massive policy implementation of demonetization, my expectation was of some radical reforms. I was a bit disappointed on that count. However, enhanced provision for MNREGA and allocations for Rural, Agriculture and allied sector and a clear push for the affordable housing sectors are the silver linings. Agriculture and Real estate are the most important employment generating sectors in India. This should improve the rural situation which is still recovering from Demonetization. Hopefully that will have a ripple effect on spending and the larger economy.”