What Does the Budget 2023 Hold for the IT Sector in India?

Recently the Budget for the FY 2023-24 was presented by the Finance Minister in Lok Sabha. Different experts from different walks of life have given opinions about the efficacy of this Budget. We asked the IT business leaders about what this Budget entails for the IT sector in India. They were largely optimistic and hopeful about this Budget's efficacy to take the IT industry forward.

Following are some of the thoughts from the IT industry -

"I am positive about this Budget as it is in the direction to bring digital revolution in India. Building 3 AI centres is one such step. Custom duty on LED panel has been cut down, tax rebate on the startups for one more year and schemes such as National Digital library, Digital Training for Farmers, Archaeological data digitisation, focus on agritech, will be beneficial for the IT industry."

--Rajiv Khanna, CEO, ITPRO

"Beyond doubt, this is a forward looking budget. IT trade has every reason to be happy, for proposals focusing on upgrading skills and technology. For the first time, government is talking about AI and proposed to open 3 new AI Centres of Excellence. Proposed boost to Mechatronics and Robotics and Data Governance Policy would help creating more Datacentres and bring in more business for Cloud.

Push for Digitisation by the government would give a new dimension to IT solution business. E-Courts are yet another booster for IT business. 

All in all, time for IT fraternity to gear up to reap the benefits of new age initiatives of Government and upskill teams and launch new IT Initiatives which may give unprecedented growth to IT Business from every vertical. In all said and done, Effective implementation of the proposals hold the key to future."

--Viren Bavishi, MD, Sapphire Micro Systems

"This  budget will  increase  the  demand of  IT products and services  from Auto, Pharma and  Banking  industries. With the set up of skill  India international  centres across  states with a focus on AI, robotics & IoT,  we are witnessing  large  demand  in IT procurements  from R&D institutes. Focus on digital payment & computerization of  agro-societies will also create  demand  for internet and last mile connectivity equipment.

The government and education segments are also seeing some PC orders which can drive small volumes in the commercial segments in  this quarter. But the impact of  overall  government procurement  would be minimal for   most of the small  time  players/value  added  resellers in the country,  who are  inactive over  marketplaces.

We can  see  good   impact of  this budget  for  System Integrators  ( SIs)  and   large size IT partners, who are able to cater multi location supply chain system as well. The change  in tax slab in this  budget will save more money  in every pocket.

Particularly in the context of  retails sales, the growing market  of  refurbished PC/Laptop will  impact largely over  the sale of  big brands in smaller  towns, and at the  same time people are now getting used to glass keyboards and ditch regular PC keyboards, thus  the demand of Smartphone/Tablet  is going to  further boost against  PC/Laptops there.

Supply disruptions are no longer an immediate concern, but softening of demand of new PC/Laptop across first time user segment is a major worry for authorized  dealer community in India." 

--Basant Mehta, CEO, Bluebell Computers

"The Budget contains several proposals to give a boost  to IT sector. We feel it is a positive Budget on many counts. The overarching principle of the Budget is that it is people-friendly since it increases the disposable income with ordinary people by way of tax cuts and exemptions, this will help higher spending by the households, leading to a boost in aggregate demand, a precondition to insulate the economy from the possible global slowdown. 

Coming specifically on the IT sector, we feel that  every major proposal, such as focused attention on Artificial Intelligence, strengthening of the digital infrastructure, digital based green energy projects, skilling youth in the high technology segments, unprecedented focus on technology etc will go a long way for the IT sector. 

The other area  that received considerable importance in the Budget was the MSME sector and start-ups. Measures like rollover of the special treatments to start-ups for another one year, focus on fintechs, reliefs to MSAMEs, roll out of 5G and setting up of 5G labs , Digi locker scheme, specific measures to strengthen the digital infrastructure etc were steps in the right direction. 

Regarding indirect tax proposals, we feel that reduction of customs duty on components of mobile phones, lithium based batteries etc. would go a long way in enhancing India’s export of the product.  The Budget proposal to extend the same facilities to other electronic goods like TVs is a welcome step, which will boost exports. 

Considering the next year as the election year, the budget was very much on the expected lines being people and industry friendly, with a  stress on “Make in India “ theme."

--Manoj Khanna, General Secretary, CMDA

"With the government razor focused on digital and fintech, we are going to see huge expansions in Cloud infrastructure, cybersecurity, document management, analytics and AI."

--Naveen Jangira, Chief Trust Officer, Erasmith Technologies

"Focus on creating a tech and knowledge-driven ecosystem will generate tremendous opportunities for the tech industry in multiple advanced domains like 5G, AI, digital, agri-tech & fintech."

--Sanjeev Singh CEO & MD, CMS IT Services

"Clearly, whether it is capital creation, digital, fintech, AI, 5G, UPI, the government wants to increase the pace of development."

--Gagandeep Singh Gandhi, Director & Co-Founder of Integre Solutions

"From strengthening India’s prowess in technology and AI and being future ready to truly unleashing the potential of 5G, the budget is holistic in its approach and will certainly pave the way for tech-enabled growth for the country in the coming years."

--Aalok Kumar, President and CEO, NEC Corporation India

“We appreciate the government’s continuous focus on the technology sector with the Budget 2023-24. The introduction of three centres of excellence for artificial intelligence to enable 'Make AI for India' and 'Make AI work for India' is something to look forward to for the upcoming digital nation.

The initiatives outlined for skill development and research in cutting-edge fields like artificial intelligence (AI), robotics, and 5G, among others are encouraging for the IT industry.

In line with the GoI’s initiative to strengthen the MSMEs, we look forward to supporting them in creating a user-friendly space and helping them further to scale up with the help of our robust and collaborative solutions.

The government’s initiative to set up 100 labs for 5G solutions across engineering colleges and the announcement around the National data governance framework will further empower the students, Indian start-ups, and researchers that will collectively help us achieve our collective vision for the 5 trillion economy.”

--Vishal Agrawal, MD, Avaya

"The emphasis to expand India'stechnological capabilities through investments in Centers of Excellence for Artificial Intelligence is a strategic move towards catalyzing the Digital India vision.  Furthermore, the government's initiative to set up 100 5G labs will widen the scope of AI applications and pave the way for adopting Metaverse, Blockchain and other digital technologies for businesses. The move will also encourage technological innovation and provide opportunities for young people to develop skills in cutting-edge technologies."

--Amit Gautam, Co-founder and CEO

"From the government’s announcement of setting up of 100 5G labs and the development of 3 Centers of Excellence for AI, all of these will go a long way in unleashing the digital potential of the country. In a world that is driven by data and AI, we see numerous and infinite opportunities ahead of us." 

--Puneet Gupta, VP & MD, NetApp India/SAARC

Seeing the comments, it appears that these leaders are very optimistic about growing possibilities in the IT sector and in growing their business further in traditional as well as new segments of the IT.

Read more from Dr Archana Verma here 

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