Expert Comments On The Budget 2016,Presented By Finance Minister Arun Jaitley on 29th February
Mr Zakir Rangwala,Country Head,ESS Distribution Pvt Ltd, March 1, 2016
Digitalization against odds
From a foreign investor’s point of view, the budget seems quite balanced and having solid focus. It is clear that initiatives promoted by the government in last one and half years are given additional push in this Budget, although real business always looks at implementation rather than intentions.
Sticking to the path of fiscal consolidation with fiscal deficit target of 3,5% of GDP is likely to have a positive impact on macroeconomics, and this is important because stability is what businesses want. However, it is very clear that meeting the deficit target will largely depend on two major factors, corporate profitability and internal demand linked to rural consumption. These challenges to Indian economy and particularly to fiscal consolidation have always been understood and this budget seems to tackle them in different manners.
As an IT company we are happy to see that the new budget brings technology into various sectors from agriculture to education to healthcare and infrastructure, and rural areas are targeted equally as the urban centers. This gives hope for increasing investments both in IT projects and infrastructure, including IT security. As more and more projects will deal with huge data, and most importantly, very sensitive one – people’s data, the question of protecting it adequately from cyber threats is crucial.
Finance minister spoke about a bill for Targeted Delivery of Financial and Other Subsidies, Benefits and Services by using the Aadhar framework that will be introduced in the current Budget Session of the Parliament and which proposes using Aadhar to develop social security platform and accurately target beneficiaries.
From data security point of view, the push given for Aadhar project under Unique Identification Authority of India in this Budget raises a lot of concerns among professionals. The Digital Depository for School Leaving Certificates, College Degrees, Academic Awards and Mark sheets that will help validate their authenticity and have easier access to them, proposed in this Budget, is another area where data management and data safety policies should be given additional attention.
This budget’s allocation of Rs 1282 Cr to Digital India Programme, Telecommunications and Electronic Industries and Rs 7205 Cr allocation to Smart Cities & Atal Mission for Rejuvenation & Urban Transformation (AMRUT) look impressive. Another good news was announcement of government initiatives helping spread digital literacy in rural India – National Digital Literacy Mission and Digital Saksharta Abhiyan (DISHA).
According to Finance Minister, the government is planning to launch a new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional households within the next 3 years. While I believe everyone realizes the challenges, it is a good move outlining a very long- tern vision, and the expertise of Indian IT businesses and start-ups could definitely help our government turn this vision into reality.
However, talking about IT infrastructure, this budget does not seem to pay enough attention to the issue despite government is actively promoting Digital India initiative and Smart Cities concept. The lack of broadband, especially in rural areas, remains a major constraint for such initiatives to have a strong impact. The penetration rate is still enormously small in our country and this could be addressed in some or the other way in this budget.
At the same time the additional push for infrastructure which our country needs the most at this very moment is certainly a good move. It is indeed important to ensure basic infrastructure to rural areas so that in future they can benefit from Digital initiatives and IT-enabled Government processes, and it seems 2016 Budget is aiming this very target. Investments announced in basic infrastructure, especially roads, for us, a company working across all states and increasing its presence in Tier-2 and Tier-3 cities mean more business in future because connectivity and easier access is something very desirable.
Various initiatives aiming at ease of doing business in the country that have been around for a while and got additional support in this Budget are definitely a good move since it simply means that the small and medium businesses as well as start-ups will be able to focus on important issues and invest more resources in business processes, including intelligence and security rather than paperwork.