Will Union Budget Give Impetus To Digital India Dream?

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Through its landmark initiatives such as ‘Digital India’ and ‘Make In India’, the Indian government has demonstrated the importance of digital technologies for industries to sustain and grow. In the Union budget 2015-16, IT industry expects the finance minister to go a step ahead, and introduce measures that will enable businesses drive digital initiatives and sustain long-term innovations in the country.

Sanchit Vir Gogia, Chief Analyst and Group CEO, Greyhound Research, pointed out, “While the government has floated a bill for common goods and service tax (GST) across the country last month, contemplation appear with respect to various aspect of GST design including price and threshold exemptions. Since the rules are yet to be released in the public, the industry is also unclear whether the tax is to be levied based on the state where a company branch is located or where its headquarters are based.”

 He added, “The government in its previous budget failed to provide any relief from multiple levels of taxes – sales tax/VAT, CVD/Excise Duty and service tax on procurement of new software. This comes as a major hindrance for organisations in the country to buy original software. The government in its upcoming budget must ensure a simplified tax regime to relieve the burden of exorbitant taxes on this account. It also gets critical since a large number of organisations are now turning to software as a service (SaaS) and public cloud for the delivery of applications.

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