Budget: IT, telecom expect more for cyber security, broadband

As the government pushes for a less-cash economy via digitisation, IT and telecom players are expecting the upcoming Union budget to contain measures that will seek to strengthen cyber security and make broadband available to all, among other measures.

“As India digitatises rapidly, holistic approach to cyber security is a pre-requisite to foster and sustain the trust of all stakeholders — consumers, businesses as well as government,” said Sanjay Rohatgi, Senior Vice President, Asia Pacific and Japan, Symantec.

“The government must consider setting aside at least 8 per cent of its overall IT budget specifically for cyber security, starting with the upcoming budget,” Rohatgi added. Finance Minister Arun Jaitley is scheduled to present the Union Budget 2017-18 on Wednesday next.

“Given the government’s focus on increasing broadband connectivity, especially in rural pockets, and push towards making India a less cash-dependent society, some measures should be announced to boost the broadband penetration in the rural areas,” ratings agency ICRA said.

“Infrastructure companies should be encouraged to install towers in rural areas and telecom operators should be incentivised to improve network connectivity in those areas,” the agency said, proposing a centralised fund and tax incentives to encourage investments in this area.

As pointed out in the recent report of a high-powered panel of Chief Ministers led by Andhra Pradesh’s N. Chandrababu Naidu, one factor coming in the way of digital payments in India is the poor penetration of pay points for transactions — like swipe machines with merchants.

In India, the ratio of pay points is 1,080 per million people, compared with 16,602 in China, 7,189 in Mexico, 25,241 in Brazil and 31,096 in Singapore.

“We feel the upcoming budget should address and encourage alternative ways for payments especially cashless transactions and offer additional benefits on digital payments,” said Akshay Dhoot, Head, Technology and Innovation, Videocon.

Stakeholders also feel payments through smartphones should be encouraged, and for this the budget should help keep the cost of devices low. The Naidu panel proposes a subsidy of up to Rs 1,000 on smart phones for non-income tax assesses or small merchants.

“The smartphone sector is eagerly awaiting for a consumer-friendly budget which will promote positive sentiment among the people and will help to further strengthen the economy,” said Dhoot.

“Further, we expect differential duty on mobiles to continue as it has helped the ‘Make in India’ initiative. We believe the government will announce a budget that will favour local manufacturing and support ‘Make in India’ and ‘Start-up India’ campaigns,” he added.

“The telecom industry has always been pro-development and has favoured a streamlined taxation policy with no unwarranted tax litigation,” said Rajan S. Mathews, Director General of the Cellular Operators’ Association of India.

The association also wants more clarity on provisions in the Income Tax Act, notably 35ABA, on deductions allowed in the case of capital expenditure incurred and actually paid by assessee on the acquisition of the right to use spectrum by paying the requisite spectrum.

Speaking of computer hardware and software, especially when the redundancy factor has started setting in much faster and getting shorter, Hemant Joshi, Partner, Deloitte in India, said the depreciation on such items should be retained at the current rate of 60 per cent.

“Further, telecom hardware products have also same or shorter life as computers and, therefore, it is recommended that rate of depreciation in relation to computers, and IT and telecom hardware products should also be enhanced,” Joshi added.

G.V. Kumar, founder of XIUS, wanted the investment allowance currently limited to companies in the manufacturing sector, to be extended to telecom infrastructure service providers, core telecom technology creators and creators of broadband facilities to encourage investments. IANS