Budget 2021

Digitalisation, the prominent theme in Budget: Binny Bansal, Group CEO, Flipkart

| Updated on January 12, 2018

The Budget this year delivered on several expected fronts and crucially laid out some concrete proposals to transform India into a Digital Economy.

With an entire section dedicated to it his Budget speech, the Finance Minister has rightly come up with measures that encourage the move to digitisation, a prominent theme since demonetisation and a necessity in today’s world.

There were several headwinds going into the Budget what with a slowing domestic economy and rising global protectionism.

Still, the Budget stuck to the government’s digitisation goal in several ways. The large allocation for increasing rural internet penetration, incentives for the use of digital payment systems, Aadhaar-based POS terminals and an overhaul of the regulatory framework are all welcome moves. The Finance Minister’s proposal to extend high-speed broadband connectivity to more than 150,000 gram panchayats also ensures digital access for India’s villages.

Extending last year's measure for start-ups, the Budget increased the eligibility for profit-linked tax breaks to seven years from five years now. This move will benefit start-up companies which are focussed on improving the efficiency of their respective businesses through the use of technology and as such are yet to make profit. It is encouraging to see the government support them without instilling the fear of losing out on tax breaks.

The reduction in the corporate tax rate for MSMEs to 25 per cent and the reduction in personal income tax rates are also welcome moves, since they will provide a boost to consumption and overall demand in the economy.

If there is an aspect that has been missed in the Budget, it is the lack of any policy impetus to R&D in general, something that could prove to be a disincentive to innovation.

Still, the Budget promises to make this a year of action, and with the right implementation, it holds the potential to propel India forward into the digital world.

Published on February 02, 2017

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