We believe that the IT Ministry has failed to represent the cause of the IT industry, since there has been a lack of any major initiative to drive growth in the electronics segment, as well as the overall IT sector.
There is a pressing need for increasing IT reach in the country, and that has remained largely unaddressed in this year’s Budget. Another important point to note is that, on the one hand, the Government is proposing the National Manufacturing Policy with an objective of raising the share of manufacturing in GDP to 25 per cent within a decade and creating 10 crore job opportunities, but on the other hand, it has failed to address the inverted duty structure. The industry was hopeful of the inverted duty structure, by way of effectively making the direct import by end-customers or trading of computers advantageous, in comparison to manufacturing of computers in India.
What was heartening was the focus on increasing skills development and promoting health reforms in the country. This would translate into significant investment on the technology front as technology’s role in becoming a differentiator becomes clear.
One sliver of hope for manufacturers is the waiver of Customs duty for the import of semiconductor chips. The FM has also taken a step forward in encouraging infrastructure investments, by allowing a 15 per cent tax deduction to companies spending more than Rs 100 core in setting up plants and facilities. This step is welcome and will help in improving productivity for companies.
Overall, while the Budget did attempt to address the core issues facing the economy today, especially that of the rising fiscal deficit, for the IT and electronics sector, there remains much scope for improvement.
(The author is Managing Director, Lenovo India.)