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Budget 2016: Tech industry gives a thumbs-up to Arun Jaitely’s proposals

The Union Budget for 2016-2017 has been presented and here are the top reactions from the technology sector in India.

By: Tech Desk |
Updated: February 29, 2016 7:18:58 pm
Union budget 2016, Budget 2016, full budget, Full Budget India, Budget reactions, Budget smartphones, Lenovo, Datawind, Intex, Micromax, Intel, Karbonn, Panasonic, Gionee, Kaspersky, Budget and technology sector, technology news Finance Minister Arun Jaitely before presenting the budget.

The Union Budget for 2016-2017 has been presented and reactions are now pouring in from various sectors. The technology industry has reacted favourably to the budget. Here are the top reactions so far.


Suneet Singh Tuli, CEO, DataWind said that doing away with the multiplicity of taxes will create a much needed boost to investor sentiment.

“We’re pleased with the broad expansion of the social net for those at the bottom of the pyramid. Such support via healthcare, employment and skills development is broadly acknowledged as a means of poverty alleviation. We applaud the government for the move towards organic farming and the general support for farmers, which will not only support environmental sustainability but strengthen the rural backbone of the country. The digital literacy scheme for rural households is a key element of these activities and can play a significant role in their successful implementation.”

He added, “We believe that the manufacturing sector should get the required thrust. Enabling the frame-work of setting up 1,500 institutes of skill development will help augment the numbers of those entering the labor market for the first time and those employed in the organized sector. Doing away with the multiplicity of taxes will create a much needed boost to investor sentiment.”

“We are happy that the government is expected to streamline or eliminate the inverted duty structure for several sectors which will embrace the needs of privately owned manufacturing companies. Overall, the Finance Minister has attempted to cover the needs of the country in totality within inherent limitations. The world would be watching closely as the expectations set out will be translated to action.”

Karbonn Mobiles

Pardeep Jain, Managing Director, Karbonn Mobiles in a statement said, “With Karbonn’s focus on indigenous manufacturing employing local manpower and skilling them, we are very happy to be an active contributor to the government’s Skill India initiative. However, the withdrawal of BCD, CVD and SAD exemption on mobile phone chargers, adapter, battery, wired headsets and speakers for actual manufacturing is disheartening and is likely to stifle the growth of Indian Smartphone players and impact their price competitiveness. The parts and components ecosystem in the country is still in its nascent stage. While the incentives on local manufacturing announced in the previous budget were welcoming, government should have allowed for a gestation period for local handset players to strengthen their manufacturing capabilities before withdrawing tax exemptions on completely built units.’’


Keshav Bansal, Director, Intex Technologies said that the Finance Minister has made a commendable effort towards creating a robust path for the future.

“With a great emphasis on the nine pillars of economy in the FY16-17 Union Budget, the Finance Minister has made a commendable effort towards creating a robust path for the future. We are happy that the budget has walked the talk for Make in India by proposing changes in the customs & excise duty structure in components and sub-components to give fillip to the creation of domestic mobile component ecosystem. The skill development push is another positive as the market demanded and industries have been desperately searching for.”


Ravinder P Singh, Director, Solutions Strategy & Business Development, IoT, Smart Cities & Digitization, Dell India said, “Today’s announcement of Digital Literacy Mission Scheme in rural areas is a key stepping stone to achieve next level of human capital transformation. India is going through a massive transformation with Smart Cities, Make in India and Digital India initiatives that will have far reaching impact in the growth of urban and rural India. Technology is not only the backbone for these initiatives but also a critical stakeholder for the success and sustainability of these programs.”

“We welcome the government’s initiative as this will help in building digital infrastructure from the ground up that will help India grow much faster and better to enable economic growth. Dell being a global leader in ICT Technology and end user computing, we consider this as a good opportunity to work with both the government and private sector and be an active player in this journey. We are committed to support these initiatives by providing the next generation of technology solutions and being the digital architects for such programs,” he added.


Arvind Vohra, Country CEO & MD, Gionee India said it is yet to be seen how this budget would affect the smartphone industry.

“The Make in India initiative by the Government has been in the highlight for a long time.  The budget 2016 clearly depicts that the government is in full support of start ups and Make In India initiatives. The Finance Minister has proposed changes  in the  customs & excise duty rates to boost Make In India, however it is yet to be seen how it would affect the smartphone industry. In my opinion this will surely act as an impetus for the sector and will go on to make the industry more competitive. Government’s initiative towards the R&D sector to Accelerate Depreciation Limit to 150% from FY 2018 is also a welcome boost for the manufacturing sector. Overall I feel it is a futuristic budget with the intention of showing the light at the end of the tunnel for boosting entrepreneurship in India.”

Kaspersky Lab
Altaf Halde, Managing Director, South Asia, Kaspersky Lab said that the budget us encouraging for the common man.

“The overall Union Budget 2016-17 is encouraging for the common man, especially the tax relief in HRA. The announcement of Digital literacy scheme to be launched to cover 6 crore additional rural households is a welcome move. This will not only boost the fast adoption of digital technologies across the country but also encourage digital means to reach out to consumers and different markets. Start-ups getting 100% tax exemption for 3 years except MAT is again a good call taken by the government, as this will entice budding entrepreneurs to start their own business and since we are targeting this sector for our software business, it could prove beneficial for us as well. Besides, it will also help in creation of more and more jobs in the country. Overall, it’s a balanced and realistic budget in difficult times.”


Rajesh Agarwal, Co-Founder, Micromax Informatics said in a statement, “The budget significantly focuses on stimulating growth in the country while emphasizing on his nine pillars — agriculture and farmers’ welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden.”

“The growth focused Union Budget 2016-2017 is announced in the light of stressed global slowdown, yet it is heartening to see how the growth has accelerated to 7.6% and the CPI inflation has come down to 5.4%. Union Finance Minister had a herculean task cut out to meet the raising expectation from industry leaders and the aam aadmi as he presents his third general budget. The Budget 2016 outlines the government’s commitment to reinvigorate the economy, kick-start investment cycle and also maintain fiscal prudence, but it remains to be seen on how quickly would we see the impact in execution,” he adds.


Sudhin Mathur, Director, Smartphones, Lenovo Mobiles Business Group said in a statement on behalf of the company that the Union budget will ensure ease of doing business in India.

Watch Budget 2016: Editors First Take on Arun Jaitley’s Announcements

“The Union Budget for FY 2016-17 is a big step in terms of aiding the common man, small entrepreneurs and companies looking to invest in India. Ease of doing business and financial sector reforms being two of the Nine pillars that the Government will look towards to transform India, is a welcome move,” he said.

His statement add, “In addition, the rationalisation of custom duties and excise duties for raw materials, manufacturing for the IT and Hardware sector apart from various sectors to boost the Government’s ‘Make In India’ sector are definitely going to boost the manufacturing sector and lower costs for firms looking to do business in India.”

Meanwhile, Rahul Agarwal, MD, Lenovo India said, “We are happy that the budget establishes a strong emphasis on technology in almost all the development areas highlighted by the Finance Minister. Technology has been recognized as an important enabler across initiatives ranging from agriculture to skill development to PDS to public procurement. Also, the announcements on the Rural Digital Literacy and the Digital Saksharta Abhiyan are positive strides to bolster the ‘Digital India’ vision.”

“Make in India and Digital India remained important items on the agenda in the Budget this year. The changes in the customs and excise duty rates on components & sub-components reaffirm the ‘Make in India’ vision of the government. This will help in building a robust component ecosystem in the country, which is very important for becoming a manufacturing hub,” he adds.

Indian Cellular Association (ICA)

The Indian Cellular Association (ICA) National President, Pankaj Mohindroo has welcomed the emphasis given to promote manufacturing of mobile phone parts, components and accessories in the budget.

“The differential duty regime available for promoting domestic mobile handset manufacturing in India has now been enhanced and extended for Mobile handset adapters/chargers, batteries and headsets/speakers of mobile handsets for supply to mobile manufacturers. The domestic manufacture will attract only 2% excise duty while imports will face 29.441% duty, giving a 27.441 % protection to domestic manufacturing vis-à-vis importers. Further, a broad category of inputs including parts, components and sub-parts has been exempted from excise as well as CVD of customs when used for manufacture’, said Mohindroo.

He further says that, “As per estimates the total production output of approx. Rs 7000 – Rs 10,000 crores of mobile adapter / charger, battery and wired headsets production can be achieved by 2018, based on this important initiative.”

Intel India 

Debjani Ghosh, Vice President, Sales and Marketing Group and Managing Director for South Asia at Intel on Union budget 2016, said in a statement, “The budget is strongly focused on bridging the divide between the ‘haves’ and ‘have not’s’, and good work by the Government in identifying the right priorities for focus under the 9 pillars called out by the FM. This budget, unlike any other, has not treated technology in isolation but integrated the effective use of technology across all the strategic imperatives in keeping with the intent of a Digital India. This budget has laid emphasis on governance reforms and ease of doing business, while highlighting the need for enhancing educational skills in order to make India a knowledge based economy.”

She adds, “Intel along with NASSCOM launched the National Digital Literacy Mission in 2012 and we are very heartened to see the government’s continued commitment towards building technology relevance at the grass-roots by extending NDLM to 6 crore rural households. We are disappointed with announcement of the R&D incentives reducing because we believe that it is critical for India to be one of the most innovative countries in the world and this move could be detrimental in building India as an innovation hub. I strongly urge the government to re-consider this move, as any restrictions on the R&D ecosystem are likely to decelerate innovation in the country and restrain the ambitious Make in India and Digital India vision.”


“Enhanced investment in the budget for infrastructure, agriculture, rural and social sectors would support India’s continued journey of inclusive and sustainable growth. Protected and secure technology infrastructure fostering trust will be critical to success of projects like e-marketplace, digital vaults for certificates and e-procurement. Legislative backing for Aadhaar should have requisite privacy provisions. Overall, a prudent budget, indeed,” said Shrikant Shitole, Managing Director, India, Symantec


Anil Valluri, President, NetApp India & SAARC, called it a transformative budget.

“This government clearly understands the power of technology as reflected in the larger flagship initiatives like Digital India. The Digitisation of the government sector, like setting up of Digital Literacy mission which will cover six crore rural households in India ensures transparency and the huge focus on promoting Start-ups’ will only help create more jobs and propel the economy further. The budget could have spelt out more steps to accelerate Digital India,” says Valluri.

Also read: Budget 2016: Arun Jaitley tables pro-rural budget, tax sops for small income Indians

Panasonic India

Manish Sharma, President CEAMA and Managing Director Panasonic India & South Asia said in a statement, “The predicted 8-10% growth rate of the Indian economy signals a great run for the country in time to come with its own set of challenges. While factors like inflation, oil prices, and rupee valuations will continue to have a major play in the way India manoeuvres itself in the in the difficult global times, we request the government to provide the requisite impetus to entrepreneurship, agriculture, and infrastructure and position India is a great investment hub. We urge the government to adopt a pragmatic approach to strengthen the Indian economy and take India to glorious heights of progress, On behalf of the entire industry, we extend our unfettered support and commitment to the nation and the government and make India a global super power.”

Must read: Budget 2016: Arun Jaitley’s top announcements across 10 sectors

Sennheiser Electronics India Pvt Ltd

Vinu Cheriyan, CFO & Director Operations at Sennheiser Electronics India Pvt Ltd, said:

“The Union Budget 2016-2017 significantly focuses on bringing socio economic development in the country while emphasizing on the nine key initiatives for economic reforms — agriculture and farmers’ welfare, rural sector, social sector including healthcare, education, skills and job creation, infrastructure, financial sector reforms, ease of doing business, fiscal discipline, tax reforms to reduce compliance burden. It is heartening to see our accelerated to 7.6% and the CPI inflation has come down to 5.4%. It is also quite encouraging to see that fiscal discipline has been given priority at today’s budget while focusing on the GDP growth.”

“It is enthusiastic to see that there was no further increase in Indirect Tax rates till GST is implemented since increase in tax rates without GST credit facility will increase the operating cost considerably. On behalf of all the microphone players, we hoped for a global alignment in Microphone Tariff heading since globally there is only one tariff heading (8518000) for all types of Microphones, where as in India there is a separate Tariff for wireless Microphones (85255050) this is creating lot of confusion and litigation. The Finance Minister rightly addressed this issue and abolished 85255050 to bring all microphones under 8518000.”

Sify Technologies

M P Vijay Kumar, CFO, Sify Technologies Limited said in a statement,

“One is surprised (though happy) to see no change in service tax rate. Is this a hint that GST rate will be sub 20%? If so, this would be good. We have managed fiscal deficit owing to the oil scenario. Capital asset formation is not happening and we are not seeing much measures in that direction. Exports are key. With present exchange rates and the “Make in India” campaign, exports should have been given some thrust. We cannot bank on present oil prices to support our forex needs in long run.

Taxing Dividend in hands of individual is retrograde. As profit is already after tax and there is dividend tax of 20%, another tax in the hands of the individual is unwarranted. It will also impact HNIs investing in start-ups / encouraging enterprise. Capital market has lot more role to play for economic growth and this could have been avoided.”

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