January 28, 2021

Post-Budget Reaction Virender Aggarwal, CEO, Ramco Systems

The budget is pro investment, lays down tax framework very clearly and should make India a lot more attractive destination for FDI. Reduction in corporate tax to 25% over the next four years will help companies have a better visibility into fund flow and invest accordingly. Increasing the threshold limit for domestic transfer pricing to Rs.20 crores from existing Rs.5 crores is a welcome step.

unnamedGood Infrastructure is the backbone of any country and I am happy to see the budget allocating great focus on giving a solid platform to attract global investments. ‘India’ is already on the global map as one of the ‘hottest’ markets for growth. Such positive measures will give a further impetus to global companies to set up operations in India.

As a key provider of Aviation MRO software to global Aerospace and Defence sector, we are happy to see the renewed thrust placed by the government in building the Defence capability in India. Ramco Aviation Software has been serving some of the largest helicopter operators in US and Europe, many of whom are actively pursuing opportunities to enter India. The government’s schemes to boost Defence segment is a welcome move. As an indigenous software product player, we hope to play a key role in supporting global organizations in their efforts to build a ‘Make in India’ product.

I am also happy to see some initial efforts by the Government to recognize and support innovation and R&D in IT by setting aside a budget of Rs 1000crs to promote start-ups and entrepreneurship particularly in technology. This will help give a much needed shot in the arm for the burgeoning IT Product industry which so far had to compete alongside the IT Services market.

On taxation front, we look forward to GST roll-out by April 1, 2016. This move will help build an efficient tax administration and could resolve the contentious issue of levy of service tax and VAT on software license. We expect Manufacturers, traders and businesses who have hitherto run their businesses on paper and point solutions, to start looking at adopting enterprise class software to manage their operations. This will open up good opportunity for Cloud based ERP software in the market. Interestingly, we are already ready to address this and will help our clients be GST-ready from day 1 of roll-out.