Indian IT Sector Unaffected By Budget 2017; Trump Remains The Big Concern

Partha Iyengar, vice president and Gartner fellow of India had this to say:

“Budget 2017 is notable first for the fact that the government has maintained fiscal discipline and resisting the urge to come up with a populist budget given the upcoming elections in a number of states. So, this is not a ‘political’ budget, which was a big fear.

In more specific terms, the biggest positive is the continued focus on infrastructure (roads, railway, housing, tier-II airports et al) in general and rural infrastructure (affordable homes, rural electrification) in particular, including e-infrastructure with the increased allocation to BharatNet (erstwhile NOFN). This will allow commercial activity to expand to the rural segment in a much more efficient manner, if the aim of achieving the broadband connectivity targets by 2018 is actually met.

The continued focus on moving India towards a more transparent and digital economy is encouraging, in order to really capitalize on the long term gains of the painful demonetization exercise. The moves to curb the black economy also bodes well for accelerated GDP growth as more of the ‘shadow economy’ becomes visible and integrated into the overall economic activity.”

The Gartner fellow also feels that the Indian IT sector is strong enough to stand on its own two feet, without support from the government, at least not until Trump truly creates misery for Indian IT workers on H1B visas.

“In another sign of the fact that the IT industry has become quite mature and does not need sops to continue its growth trend (other factors like Trump notwithstanding), there were no overt steps taken – and none expected – for the industry, and there is no hue and cry about it. In a sense it is a no-news is good-news story for the sector from a budget perspective,” the Gartner fellow further said.

Rajiv Srivastava, managing director of HP India said,

“The Union Budget 2017-18 is extremely positive for the common man, farmers, small and medium businesses and would drive significant growth in Indian economy. Government’s commitment to make taxation rate reasonable, tax administration fair and expand the tax base is the step taken in the right direction. The tax relief given by the Government for the middle class tax payers will definitely boost the purchasing power, thereby aiding the overall growth of the economy. The major tax relief given to the MSMEs and SMEs with an annual turnover of rupees 50 crores, would enable them to invest in job creation, increase capital expenditure and explore their digital journey.

As Mr. Srivastava outlines it technology will be a prominent enabler of the government’s proposed plans. As service providers of IT software and hardware the sector will indirectly hope to gain financially and contribute to the development of digitally savvier India.

“The strong emphasis laid on technology in almost all the development areas in the budget reaffirms that technology has been at the forefront of India’s recent economic growth and digital transformation. It has been recognized as an important enabler across initiatives ranging from agriculture to skill development to manufacturing and infrastructural development. The Government’s focus on making India a digital payment economy will definitely help companies like HP to contribute in technology adoption in rural and semi-urban areas, thereby bringing the Digital India’ vision closer to reality. We also welcome the Finance Minister’s commitment to introduce and implement Goods and Services Tax (GST) as per schedule and start GST awareness programme from April 1, 2017 for all stakeholders,” the HP India head said.