Union budget 2015 : Bhaskar Pramanik, Chairman-Microsoft India

Bhaskar Pramanik, Chairman – Microsoft India

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

The Budget retains the focus on financial inclusion, education, health and agriculture. It has increased focused on infrastructure development, housing and manufacturing in India. Overall, Budget 2015 is wide in its scope and takes into account the interests of diverse sections of society – middle class, farmers, youth, aged and the disabled. It endorses a vision of India where there is a house for every family with24 hour power, potable water, and all accessible by road, and where at least one member of the family is employed. And all by 2023, when India celebrates its 75th year of Independence. The FM also talked about building a better social security system for its citizens to provide financial security.

The budget talked about financial discipline, a monetary policy framework with RBI that will keep inflation at less than 6%, but look at possible double digit growth. The FM is looking at reducing the fiscal deficit to 3% but in three years’ time to release additional investments.

The focus on infrastructure and housing investments is good, as it will kick-start the economy and have a ripple effect across all Industries. The FM understands the need to kick start infrastructure projects through increased investments, the need to revitalize PPP with the GOI taking additional risk. The focus on technology as a backbone for government processes and systems is the right approach example GSTN, JAM was stressed.

The Government has recognized the need to support startups, and incubators and has acknowledged that a culture of innovation needs to be fostered. Budgetary allocations for incubators, a mechanism for supporting self-employment and talent utilization will allow startups and MSMEs to access the funds and talent, creating new avenues for growth and employment.

We must however hold the Government accountable for delivering on their budget promises.  Many of the announcements made in previous budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented.  It is nice to make a mention of the measures for dispute resolution in the speech, but the key is implementation.

We will also need to see if some of the other Tax related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have of driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20%.”