It’s been called a digital budget, a technology positive budget. Finance Minister Arun Jaitley’s 2017 Union budget looks like it has been designed to carry forward the positives from the various Digital India schemes launched in 2016 including the impetus on digital transactions. Many of the tech industry experts had varying expectations from the budget. Notwithstanding these expectations, the 2017 budget, will always be remembered for being announced a month earlier than usual as well as integrating the Rail budget into the Financial Budget. Following are the areas where the Union Budget seeks to incorporate technology to enable better services:
- Rs 10,000 crore will be allocated to the Bharat Net project. This will include widening the scope of high-speed broadband on optical fibre in more than 1.5 lakh gram panchayats.
- Through the ‘Digi Gaon’ initiative telemedicine, education and skills will be provided.
- Two new incentives have been announced to boost the boost digital payments via BHIM app – referral bonus to individuals and cashback to merchants.
- Finance Minister has proposed exempting excise duty on various point of sale (POS) machines and iris readers to encourage digital payments.
- Government has allocated Rs 2,500 crore benefits for UPI based payments and other digital payments.
- Larger thrust on digital payments includes digital of cheque donations only to political parties as well as amendment of Income Tax Act to ensure that no transaction above Rs 3 lakh is permitted in cash.
- Railways will discontinue service charge on tickets booked via IRCTC web portal and offer competitive ticket booking facility.
- Rail travellers will also be able to use digital services like Coach Mitra facility to register all coach related complaints and SMS-based ”clean my coach service”.
- Aadhaar-based smartcards will be issued to senior citizens to monitor health.
- Space technology will be used in a big way to ensure MGNREGA works.
Despite these favourable schemes purported to empower the common man and widen the scope of financial inclusion, the ‘digital’ budget missed on addressing some concerns around digital payments. Payment companies have been advocating that costs of incentivising digital payments should be borne by government and RBI and not customers or financial intermediaries. The Ratan Watal committee report emphasised interoperability issues and open access to payment systems by non-bank payment service providers. While these issues were not directly addressed, the government has decided to review and amend the Payment and Settlement Systems Act, 2007.
Overall, the 2017 Union Budget received largely mixed reactions from technology experts in the industry. Some of these were:
Tax benefits, incentives to use digital payments and extending loans based on a digital footprint will create a larger merchant ecosystem for digital payments. Overall, it is a great budget that will encourage people to move to the formal economy and derive benefits. – Vijay Shekhar Sharma, Founder & CEO – Paytm
The Budget continues to focus on transforming India as a digital leader by allowing for easier flow of capital to create jobs and fostering innovation in our country, connecting Bharat and encouraging indigenous manufacture of POS terminals. These steps towards creating a digital economy will help grow our ecommerce ecosystem. – Neelesh Talathi, CFO, Pepperfry.com
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. – Rajiv Srivastava, MD, HP India
Overall the budget is pro-entrepreneurs which will help create jobs in India, hire skilled talent at low cost and also improve industry output. – Sameer Grover, Founder and CEO, Crownit
The government’s move to enable startups, incorporated after 31 March 2016, avail of a three-year tax holiday in their first seven years is quite commendable. Government should now start thinking about how to reduce startups’ real cost in the early years. – Mayank Bhangadia, CEO and co-founder, Roposo
Abolition of FIPB is one such encouraging measure which will enhance the ease of doing business in the country. Overall it is a growth-oriented budget with the government undertaking multiple measures to provide the necessary impetus to the economy. – Deven Mehta, Managing Director, Smart Card IT Solutions Ltd.