Technology industry cheers Budget's focus on AI, ML; asks for revival of SEZ policy

One of the key asks from NASSCOM for boosting the start-up ecosystem was the issue of ESOPs and allowing scaled up startups to benefit from the tax incentives.

The technology industry has cheered the Union Budget 2020's thrust on the technology sector applauding various announcements including the Rs. 8000 crore mission on Quantum Computing, the policy for private sector to build data center parks and the abolition of the Dividend Distribution Tax.

While presenting the Union Budget, finance minister Nirmala Sitharaman said that technology, will be used for better monitoring of the economic data, building a preventive regime for diseases under Ayushman Bharat, capturing and protection of intellectual property rights, improving agriculture and sea-ports and delivery of government services.

A new scheme for incentivising domestic manufacturing of electronics specifically mobile phones will also be announced, she added.

Debjani Ghosh, President, NASSCOM said, “Budget 2020 and the finance minister’s speech has well-articulated India’s vision on not just being a leading provider of digital solutions, but one where technology is the bedrock of development and growth’.

Nasscom welcomed the announcements on Quantum Computing, Data Center policy, IPR portal, CoE etc, along with the removal of Dividend Distribution Tax which was a long pending demand from the industry.

It, however said that the Budget lacked focus on accelerating service exports from the country. “The technology services sector has been a key contributor to India’s exports and GDP, NASSCOM had recommended that new investments by services companies in SEZs should also be eligible for the lower rate of 15%.

Further, a future ready SEZ policy is needed and there was no indication of that in the Budget. Similarly, the focus on enabling more R&D solutions from India through specific programs was not covered in the budget.”

One of the key asks from NASSCOM for boosting the start-up ecosystem was the issue of ESOPs and allowing scaled up startups to benefit from the tax incentives.

The Budget 2020 has simplified the ESOP policy and extended the tax incentives for up to 100 crore startups over a 10 year period.

Incentives for MSMEs like audit exemptions for upto 5 crore companies are also expected to enable ease of business for small companies.

Subho Ray, President of the Internet and Mobile Association of India (IAMAI) said that, "The focus on technology and digital infrastructure is a step towards realizing the trillion-dollar economy and will open up new opportunities for demand generation.”

IAMAI added that the plan to provide digital connectivity to all public institutions at gram panchayat level is ambitious and will usher in the much-needed digital revolution under the Digital India initiative, and will also help in the last mile connectivity.

On the sops for electronics manufacturing, IAMAI said that the government must provide both productions-based incentives as well as export-oriented incentives to encourage Indian domestic manufacturing with a special focus on high-end smartphones.

"I am mindful of presenting this budget in the backdrop of two crosscutting developments -- proliferation of technologies, specially analytics, machine learning, robotics, bio-informatics and Artificial Intelligence; and the number of people in the productive age group i.e. 15-65 years in India, being at its highest," Sitharaman said.

Nasscom said that the finance minister has rightly articulated that India will have the largest working age population by 2030 and the importance on skills and education found mention in the budget through internships, apprenticeship and other schemes. "Schemes on upskilling / reskilling however did not find any mention in the budget," it said in a statement

Prakash Mallya, VP, and MD – Sales and Marketing Group, Intel India said that the Union Budget highlights the role technology-enabled innovation can play in leapfrogging the nation. "From integration in priority sectors like agriculture and healthcare to a continued focus on smart cities, the first budget of the new decade clearly outlines the significance of a digital-first India in realizing the country’s potential. I am especially encouraged by the

efforts to use artificial intelligence (AI) and machine learning (ML) to improve disease detection and pre-emption as part of the PM Jan Arogya Yojana. Such applications of emerging technologies combined with the focus on increasing the penetration of fibre connectivity in the nation have the potential to fundamentally impact the lives of millions in the coming years."

Source - Economic Times