Here are some of the post budget reactions from the digital and mobile sector businesses in the country:
BookMyShow: Ashish Hemrajani, Founder and CEO, Bigtree Entertainment, BookMyShow, stated that the service tax exemption on the entertainment industry is an encouraging step since it would help the industry towards bigger and better things and offer respite to entertainment which was previously facing a challenging period due to heavy taxation.
PolicyBazaar: Akshay Mehrotra, Chief Marketing Officer, PolicyBazaar stated that this year’s budget had been a quite a non- event and didn’t help in boosting fiscal consolidation, food security or DTC. Consumers can now get around Rs 22,000 more in their hands as the highest saving possible, but this will be negated by the increase in service tax and inflation.
IndiaMart: Dinesh Agarwal, Founder & CEO, IndiaMART.com, stated that the key highlight of this budget has to be the government’s intent to implement GST and they hope that the government implements it by August 2012 deadline set by the finance minister. Other positive features include the allocation of Rs 5,000 cr to SIDBI for venture fund which would enhance equity availability to MSMEs, exemption of capital gains tax from sale of property when proceeds are used for investment in SME, raising the turnover limit for compulsory tax audit for SMEs to Rs. 1 crore from the existing Rs. 60 lakh and giving fillip to handloom, powerloom and leather clusters which will aid the growth of small enterprises.
Sulekha.com: Satya Prabhakar, CEO & Founder, Sulekha.com mentioned that the budget gives a feeling of brick-and-mortar sensitivity in a period where subsidies in technology infrastructure is crucial to growth. He was also concerned with the absence of any specific subsidies in cost of Internet access since this is a key growth requirement for India which is amongst the weakest in Internet penetration. He added that the company hopes that the PPP (Public Private Partnership) in infrastructure as a part of the 12th 5-year plan will give a fillip to technology/telecom infra investments.
Airtel: Sanjay Kapoor, CEO, Bharti Airtel, India & South Asia, stated that the telecom sector is already burdened with multiple and high tax levies which account for 30% of the telecom services revenue and the rise in service tax from 10% to 12% will further increase the cost of services to customers and also impact the profits and losses of telecom companies. He also stated that the proposals on mobile based fertilizer subsidy tracking and heightened IT enablement will drive the growth of Information and communications technology (ICT) and the FM’s recommendation for gap funding of telecom towers, cables and optic fibres should lead to a reduction in cost of the capital for telecom infrastructure. In addition, the reduction on duties on mobile parts will enhance affordability and thereby drive the demand for mobile services across the country.
RIM: Sunil Dutt, Managing Director, Research In Motion India stated that the budget was well balanced and focuses more on long-term growth aspects instead of short-term populous measures. The exemption on mobile phone parts and the increase in disposal income may further make the smartphone affordable to larger section of the masses, thereby increasing the penetration of smartphones. He also stated that the budget is expected to raise activity levels in agriculture, banking & m-payments industry with development of tier II, III markets and thereby increasing the adoption of mobility, which will contribute to the overall growth of the economy.
LG: Soon Kwon, President South West Asia region & MD LG India informed that the raise in income tax exemption will provide an increase in the disposable income for consumers but it will be offset by 10 percent to 12 percent hike in Central Excise Duty. Also, rolling back of financial stimulus package will affect consumer sentiment when the industry is already struggling with steep dollar exchange rate and various input cost increases over the past year. The announcement of APA (Advance Price Agreement) is a welcome step as this will lead to a reduction in transfer pricing disputes while the custom duty exemption on LCD/LED panel and memory cards of mobile phones is appreciated, although it will only affect their costs partly.
Sify: MP Vijaykumar, Chief Financial Officer, Sify Technologies stated that the budget was not a disappointment in its entirety and was glad that there is reaffirmation from the government that GST, DTC will soon become a reality. The announcements towards fiscal discipline in terms of subsidy cap and the focus towards long term growth – R&D, venture capital funds scope enhancement, Investment linked deduction are in the right direction however it is yet to see how the government will deliver on taboo subjects until now, like the subsidies and fiscal deficit.
Sistema Shyam Teleservices (MTS India): MTS India President and CEO Vsevolod Rozanov stated that the increase in service tax from 10% to 12% would increase cost of ownership of a mobile phone, which becomes quite significant for CDMA based mobile services who serves customers from the bottom of the pyramid. (via Telecomlead)
Karbonn Mobile: Karbonn Mobile MD, Pradeep Jain welcomed the Finance Minister’s move to cut customs duty on memory cards for mobile phones, which will help in increasing the mobile phone usage in the country. He also welcomed the government’s move of the exempting mobile phone parts from basic custom duties which will bring down the manufacturing cost of mobile phones.
GoDB Tech Pvt Ltd: Mahavir Chand, Managing Director, GoDB Tech Pvt Ltd, stated that the use of mobile technology to manage fertiliser movement and subsidy was a novel step and will probably act as catalyst for other M-governance projects.
Belkin: Mohit Anand, MD, Belkin India Sub-continent, stated the announcement of government’s intent to implement GST was welcome, since it would bring down overall cost of goods and services in the country, however, he said, that the government should ensure it translates into actual implementation by August 2012, as stated by the Finance minister. In addition, he added that that government efforts towards the implementation of FDI in multi retail have instilled hope and anticipation in the industry. He also expressed disappointment over the 2% increase in excise duty, since he felt, it would have a direct impact on prices and would hurt already weak consumer sentiment.
Ferns N Petals: Vikaas Gutgutia, MD and Founder, Ferns N Petals, expressed happiness over the government’s announcement of Rs 1,00,000 crore increase in the agriculture credit target to Rs 5,75,000 for the next fiscal and an increase in the outlay for farm sector by about Rs 3,000 crore, but was disappointed with no significant announcement for the Retail Industry and the increase in service tax and the excise duty slabs.
Our Budget 2012 Coverage:
– Budget 2012 Expectations From Digital Businesses: COAI, IAMAI, Fashos, Milagrow, Ferns and Petals, GoDB Tech, Airtel, DoT
– Budget 2012 Live: Lok Sabha TV, Moneycontrol, NDTV Profit, YouTube, ET Now
– Budget 2012: Handset & LCD Duties, Aadhaar Payments, Venture Capital, Service Tax Up; Digitization Of PDS