The annual Union Budget scheduled to be announced on February 1st, 2023, is expected to be growth oriented focusing on technological advancement, widespread allocation of resources, bridging the digital divide and addressing the security concerns of the virtual world. While many believe that the budget will bring in the required relaxations in taxes, there have also been talks about making major changes in each sector to improve the revenues and the employment graph of the country.
Key thought leaders sharing their expectations from the upcoming budget
The technology sector has secured substantial investments in the last few decades to facilitate innovation and R&D. With the introduction of 5G, AI and tech like AR, VR, AV, Cloud computing and related; the segment has opened doors to global investment and manufacturing capabilities in the country.
The current tech scenario in the country weighs highly on both audio and visual aspect of technology. We have seen advancement in both areas simultaneously to boost sales and profitability of brands operating in this domain. Aligned with this, ViewSonic a leading provider of audio-visual solutions believes that the innovation in the sector has been steady in the last few years. According to Mr. Muneer Ahmad, Vice President, Sales and Marketing, ViewSonic India, “The audio-visual industry is embarking a steady growth in recent years due to technological advancements, industry trends and consumer preferences. Projectors, monitors, interactive displays, and LED video walls are gaining significant momentum and are becoming an integral part of corporates and industries. In this upcoming budget, we expect the Government to reduce the duty on raw materials, electronic parts and components of sub-assemblies. Additionally, the Government should also consider relaxation on the GST rates. For instance, the projection category falls under 28% and IFPs under 18%.”
The technology sector has always had muti-faceted approach influencing many sectors at once. While the tech sector is expected to grow, the EdTech sector is looking to reduce the digital divide and expand the development reach to Tier 2 and 3 cities focusing on upskilling and research.
Fostering a new realm in the learning ecosystem, Primebook is a revolutionary first-of-its-kind, made-in-India Android laptop intended for students and vocational learners. Primebook was founded by IIT Delhi alums and co-founders Aman Verma and Chitranshu Mahant in 2018. The brand has since worked with NGOs, schools and EdTech companies across geographies to enable a smooth transition to hybrid and e-learning. Commenting on budget expectations, Mr. Chitranshu Mahant, CEO and Co-founder, Primebook says, “We expect this year’s budget to focus on reducing the digital divide, which has kept many students from accessing education during the pandemic. The fast emergence of schools, colleges, and multi-disciplinary academic centres offering online K-12 education and vocational training in India’s Tier 2 and Tier 3 cities continues to draw solid numbers of students from Tier 2 and Tier 3 states. In 2023, we hope the government continues to support the penetration of innovative tech while inducing increased capital to develop better infrastructure, internet connectivity, access to modern devices, ensuring last-mile delivery, and quality guidance to the underserved who have been left behind owing to the digital divide. Last year, the government slashed its allocation towards education by 6% to increase fund allocation towards healthcare and other emergency services. However, we expect an increase this year to facilitate a better and equitable digital learning environment across states.”
Edverse, the world’s largest immersive, interactive, and insightful education metaverse company is hopeful that government focuses on promoting emerging technologies in the education sector and building a strong e-learning infrastructure. Mr. Yuvraj Krishan Sharma, Co-founder & CPO Edverse further adds, “The Indian Edtech market has seen steady growth in recent years due to technological advancements, increased demand for skills in a competitive job market, and improved accessibility of education. The sector is projected to continue growing in 2023.
In the upcoming budget, the government should focus on promoting emerging technologies in the education sector and building a strong e-learning infrastructure. This includes the adoption of AI, AR, VR, ML, and metaverse, which can help improve overall learning, upskill, overcome geographical barriers, and create more job opportunities for the future generation. The government should also emphasize mandating and investing in skill development, providing training in these technologies, exploring the possibilities of the metaverse, and offering subsidies for EdTech startups in areas such as R&D, tax incentives, and financial benefits.
Additionally, a comprehensive policy to help start-ups survive and grow during predicted economic downturns should be implemented. Improved internet connectivity, including last-mile access, reasonably priced 5G plans, and strict data privacy rules, should also be prioritized to benefit from the technology of metaverse and make education more accessible to everyone.”
Talking in line of allocation of resources and development in various aspects; companies believe it is imperative to provide training programmes for educators to ensure efficiency in the field. Talking on the similar thought, Mr. Nihar Sripad Madkaiker, Co-founder at iXR Labs said, “In line with the trends of the past few years, we would expect the budget allocation to increase and hope it gets closer to the NEP-recommended 6% of GDP. There are two specific areas that the increased budget allocation needs to be made towards, firstly, an increased digital push that education needs, through the implementation of the latest technologies. An important part of this is that some allocation should go towards training programs for educators to ensure they are proficient in the utilization of new technologies. Secondly, an increased focus towards skill development to help improve employability.”
The telecom sector like the tech sector is in full throttle, energizing multi-directional initiatives like the introduction of 5G, the new draft Telecom Bill, rationalization of Adjusted Gross Revenues (‘AGR’) or 100% FDI through the automatic route. Cyber security remains a major concern and a topic of debate for many.
CloudConnect, a DoT licensed Virtual Network Operator offering a fully operated and managed cloud-based mobile-first platform believes that Unified communications and Digital Work Space will be the new pillars to achieve agile and higher economic productivity in India in the telecom sector.
Talking about the cloud capabilities of the country, Mr. Gokul Tandon, Group Executive Chairman, CloudConnect Communications further adds, “Cloud-native telecommuting and hybrid workforce lead economy is fundamentally more agile, flexible, collaborative and productive, providing superior work-life balance in India and globally. Unified communications and Digital Work Space as a Service (UCaaS/ DWaaS) are two new pillars being pioneered and deployed to achieve this agile and higher economic productivity in India. This Indian experience could provide useful learnings, building blocks and adoption blueprints in many emerging and G20 markets.
To aid pervasive adoption and derive benefits, it is proposed that a UCaaS/DWaaS Centric Mission Mode Initiative be created under DoT 5G taskforce, with active collaboration and participation from MEITY, Niti Aayog, and Ministries of Industry, Commerce, MSME and Skill Development – to boost our overall economic productivity and growth. This should be actively linked to the G20 Tech Innovation Taskforce being led by India. Furthermore, we recommend that the Digital MSME Initiative be revived and funded adequately to include UCaaS/ DWaaS elements and provide subsidies/grants to MSMEs to re-skill and re-tool themselves.
To embrace this next critical generation of technology and national/global outlook of productivity, better work-life balance, happiness, and well-being.”
Additionally, in terms of regulatory levies, brands are expecting that license fee may be brought down from 3% to 1% to cover only administrative costs.
India has emerged as the third largest start-up ecosystem in the world, after the US and China. Experts believe that between the year 2020 and 2030 will be the “entrepreneurial decade” for the country. Owing to such high interest and investment avenues; it is only fair the budget expectations are on the positive end of the spectrum.
One of the most important expectations of the startups is to increase the GST exemption slab for them from the current 40 lakhs to 10 crores. Furthermore, the sector also expects the government to reduce the minimum alternate tax (MAT) from 15 per cent to 9 per cent.
Commenting on the tax reforms, Mr. Tanuj Gangwani, Co-founder and CFO, Geniemode added, “Given the challenges faced by B2B apparel sourcing and supply chain disruption in 2022, we feel GST and TDS need to be decriminalized to reduce the already rigid and stringent legal framework for business taxes in India. The government should maintain the tax rate on corporations and continue its recent trend of providing certainty in the tax code. The next decade is India’s time to shine, and a friendly budget in 2023 will be what it needs to succeed. After a year of high cotton prices, the industry calls for government aid to help tackle fluctuations in natural fiber. Therefore, we hope the government allocates funds to achieve international status for Indian cotton. We believe the government should also consider a Cotton Price Stabilisation Fund Scheme.
Furthermore, the budget must have provisions for improving export subsidies for exporters. It will ensure that India is not left behind in world trade. Additionally, there is an increasing need for businesses to maintain sustainability in supply chain management, along with the complete automation and implementation of blockchain technology. This will rebalance the disruption caused in the last 3 years. We anticipate that the upcoming Union Budget will address and ease the challenges faced by the industry in the past years.”
With tax relaxations, higher investment opportunities and development across sectors being the centre for the budget expectations this year; companies surely are looking towards reforms that will aid them in expansion of business models and an upward growth trajectory.