Budget 2015: How telecom will boom

Budget 2015 presented by finance minister Arun Jaitley focuses on creating disposable income to majority Indians and hence telecom services revenue will grow.

Rajan S Mathews, director general, COAI

Budget proposals for 2015-16 do not address the requirements of the Indian telecom sector.

Hemant Joshi, partner, Deloitte Haskins & Sells 

The main negative points that will impact the telecom industry include additional service tax of about Rs 2,500 crore on telecom services impacting consumer and /or operators; excise duty on mobile handsets including cellular phone being increased from 6 percent (with CENVAT credit) to 12.5 percent and no change for paying excise duty at 1 percent without CENVAT credit or NCCD of 1 percent on mobile handsets including cellular phone.

Bhaskar Pramanik, chairman, Microsoft India

The Finance Minister has presented a broad-based Budget focused on accelerating India’s inclusive growth. The Budget 2015 reiterates the major programs and initiatives that have been previously announced — Jan Dhan Yojana, Skill India, Swach Bharat, Make in India and Digital India.

Arvind Bali, director & CEO of Videocon Telecom

A positive budget that increases disposable income, people can be more connected and leverage the benefits of basic telecom services. The trinity of Jan Dhan, Aadhar and Mobile is positive. Budget resonates Make In India spirit. Speedy implementation of 7.5 lakh KMs in 2.5 lakh villages through NOFN will enable more rural communities to benefit and improve effective governance.

Sandeep Chaufla, partner, Direct Tax, PwC India

Telecom sector will benefit because the Budget 2015 proposes to reduce the withholding tax rate to 10 percent which is in line with rates provided in most of tax treaties

Factors such as reduction in corporate tax rate from 30 percent to 25 percent over next four years, postponement of GAAR deferred by two years, cut in FTS / Royalty tax rate from 25 percent to 10 percent, domestic TP applicability limit revision to Rs 20 crore from existing Rs 5 crore, reduction of SAD on imports and tax deduction on employing new workforce extended to all sectors with threshold  reduced will be positive for Indian telecom.

Nigel Eastwood, CEO of New Call Telecom

Small and medium sized companies hold the key to growth and by giving start-ups a boost will only expedite their growth story. The reduction in corporate tax from 30 percent to 25 percent over next 4 years is a welcome one. The reduction on taxes on technical services from 25 percent to 10 percent will also cut down costs for service providers like us who have focused plans for realizing the Digital India dream.

Mobilephone user

Sanjeev Sarin, founder & CEO, Ozone Networks

It’s a budget for the working class and professionals. It gives a big boost to the farming and manufacturing sector and also encourages employment opportunities by giving preference and building a strong foundation to domestic manufacturing in India.  A very encouraging step forward is the decision to induce investment by 70,000 crore in the infrastructure sector for FY 15-16.

Pankaj Mohindroo, national president, Indian Cellular Association

The Excise Duty differential of 11 percent on domestically manufactured mobile phones over imported phones against the differential of 5 percent will create the necessary pull for investments from India and abroad into the industry and will realize the Make in India program.

The Government will have to fine tune the differential keeping in mind that smuggling of finished mobile phones into the country from China has always been a big problem. The 11 percent differential when added to high VAT rate of 15 percent in major states will be very lucrative preposition for the grey market operators.

Hariom Rai, co-chairman of the Fast Track Task Force set up by the Government for promotion of mobile industry

The inclusion of tablets in the same category as mobiles for promotion of manufacture for the differential 11 percent duty is a long awaited demand. The technology convergence of mobiles and tablets has been accepted by the new Government. The beginning of tablet manufacture will give a boost to the manufacturers and also the consumers for whom availability, service and price will be major gains.

The removal of 4 percent SAD for manufacture of all Electronics goods in the WTO IT Agreement too will create the manufacturing ecosystem. Laptops should also be in the same category as mobiles and tablets so that entire segment of computing and communication in the mobile sector moves together in harmony with each other.

Partha Iyengar, country manager (Research) – India, Gartner

In terms of the IT industry specifically there is a nod for the needs of the IT industry in terms of making a statement that the needs of the IT industry will be addressed in terms of ease of doing business, capital access etc. However, without reviewing the details of exactly how this is to be done, we will need to adopt a wait and watch approach to see how effective it will be.

Reducing the tax on R&D and innovation investments to 10 percent is a very positive move, both from the point of view of facilitating technology transfer as well as incenting companies to invest more in driving innovation. Along the same lines, the nod to the ‘start-up ecosystem’ in the country is a major positive. This is the first time such language has made its way into the budget and a good reflection of the fact that job growth has to be broad based by facilitating the SME segment and even the start-up culture in the country.

Keshav Bansal, director, Intex Technologies

The much awaited GST announcement for April 2016, will surely rejuvenate the industry as manufacturing sector will become more competitive and support the ‘Make in India’ initiative, it will be interesting to see how it will be rolled out in the coming months. Another complementing factor was the focus on skill development, National Skill Mission will be a great initiative to develop youth employability thus contributing to the growth of our country. With focus on growth and job creation, it is sure to drive India’s global competitiveness.

Uday Challu, CEO of iYogi.com

It is good to see the government’s focus on encouraging start-ups in the county. The allocation of Rs 1,000 crore under the Make in India initiative to support the start-up ecosystem in India is a special focus on IT start-ups and this will encourage entrepreneurship and product innovation under the Self employment and talent utilization initiative. This will help in overcoming challenges faced by the community and also to raise global capital.

Ambarish Gupta, CEO and founder, Knowlarity Communications

Even though a promising budget is released from a startup perspective and rate of Income-tax on royalty and fees for technical services reduced from 25 percent to 10 percent to facilitate technology inflow, few of the expected changes have been postponed for next year such as service tax relaxation on products and the simplifying the complex Company Act 2013.

Y Guru, c hairman and managing director of Celkon Mobiles

Government has shown its intent to create a business friendly environment and boost the ’Make in India’ initiative. The thought process of merging the Skill India initiative with Make in India is the right approach as skill development and manufacturing complement each other in the long run. The focus of the budget has been more towards boosting infrastructure, agriculture, healthcare and manufacturing and hits the right chords.

Debasis Chatterji, CEO of Netxcell

The Jan Dhan Yojana, Coal Auction and Swacch Bharat program have given a very good start by dealing with the fundamentals of government fund distribution honestly, starting thermal power plants and to make India disease free. The budget showcases the fundamental change in the government’s thought process and is different from so called popular measures. The initiative to build 6 crore toilet under Swacch Bharat Yojana, will trigger growth in FMCG and ancillary industry and create lots of service jobs.

Baburajan K
editor@telecomlead.com