Union Budget 2021: Look What India's Top Distributors expect

The Union budget 2021-22 will be presented by Union Finance Minister Nirmala Sitharaman on 1 February 2021. Post prolonged lockdown due to Covid-19 and the crisis that followed up many have been curious about how the Indian economy would fare as the ramifications of the same is seen across the globe. We bring in the view of India’s Top National Distributors and their expectations on this prior to the union budget.

 Suresh Pansari, Co-founder and Director, RP tech India

“India is now moving towards becoming Aatmnirbhar (self-reliant) in terms of imports. A lot of expectations are from the union budget to provide support for local manufacturing. The IT hardware industry’s expectation from the union budget as below:

• Import Duties should be levied on all IT products (for both chapter 8471 and 8517), to encourage domestic manufacturing.
• PLI should be announced for IT products (for both chapter 8471 and 8517), on a similar line of Mobile Phone.
• Ease of doing business should be implemented by reducing to single-window approval.
• Infrastructure improvement for Export base IT manufacturing.
• Stable Power and quality Water should be made available, which are required for high tech products manufacturing domestically.”

Sanjiv Krishen, Chairman, Iris Global Services Pvt. Ltd

"While I cannot predict what the budget will throw out I believe the following points would fuel growth in the economy specially for the IT Industry:

1. To encourage Work From Home and Online Education, concessions should be given to parents who make the investments by increasing the standard deduction for individuals from the current Rs 50,000 to Rs 1 lakh in Income Tax.
2. The GST on IT products should be reduced from 18% to 12% to make computers more affordable.
3. The customs duty for networking products like WiFi should be 0% to make it uniform as it is for computers.  Today there is ambiguity as the customs duty varies for different networking items required to link computers."

Prabhakar Iyer, CFO, Ingram Micro India

“The TCS provision should be restricted only to sell to Non-PAN holder.  The annual information of the sale made to PAN holders can be sought by the department as part of Annual Information return.

Keeping in view the challenges faced by the company in meeting the compliance requirements under such conditions additional deduction should be given for the expenditure incurred in the previous year and the current year to meet COVID-19 guidelines.  The expenditure should also cover expenditure to meet Work from the Home arrangement.

Corporates incur the expenditure for social upliftment causes being a business partner with Government. We would like to Government to consider the CSR spend as a tax-deductible expenditure so that the purpose of social upliftment under Companies Act, 2013 as well as working capital for corporates is well balanced.”

Prashanth GJ, CEO, TechnoBind

"Yes - there are pointers to a V-shaped recovery and are being talked about by the industry experts. But I would like to exercise caution and would say that to vehemently declare that we are on the path of a V-shaped recovery is slightly premature. Can we get onto a V-shaped recovery - surely yes. There are many reasons to support this - the fact that vaccines are now reality will bring in the much-needed confidence for the economy - we will see investments that were on a go-slow mode pick up steam, which will have a cascading effect for the positive on the economy. We have already seen 2 or 3 months of rising GST collections - they are surely tell-tale signs of a positive upward trend. But it is also a fact that India has lagged behind other emerging economies and that is where the budget needs to focus on - how do we work on the 'ease of doing business' part and the squeezed up liquidity situation for the Indian Corporates. Core sectors like steel, power, cement are still declined and this need to be spruced up with support in the budget, for these core sectors, recovery is very important for the overall economy to be in the growth model. The informal sectors which in essence have a big part in the Indian scheme of things also need to be looked into during the budget to ensure that this V-shaped economy that we are hoping for becomes a reality and India can benefit from the same".

S Sriram, Chief Strategy Officer at iValue InfoSolutions

"Union Budget 2021-22 is going to be challenging and a critical one with fiscal deficit challenges on one hand along with the need to revive/sustain growth momentum across the board. Q1, Fy21 saw the biggest contraction by over 27% in GDP. Q2 was a good recovery moving H1 GDP to -11.6%. H2 GDP projection is estimated at 3.4% GDP growth implying Fy21 GD P numbers at -4.2%. Even before pandemic hit us, the GDP was decelerating steadily from 8.2% in Fy16 to 4.2% in Fy20 and now moving down to -4.2% in Fy21 which is an 8% fall in a year. Many small businesses have shut and many more have downsized in a big way leading to employment losses never seen in our history. The key need hence is to revive the economy, business and employment to drive consumption. Fiscal deficit worries need to be de-prioritized with a clear focus on growth revival and job creation.

Government has to lead recovery through CapEx both at central and state level. More money has to be put in the hands of business and people through direct and indirect tax cuts, to enhance spends. We have seen only corporate tax cut but nothing significant on personal and indirect tax side. Special incentive schemes need to be extended to businesses increasing headcount. Technology investments came as a saviour for businesses due to the sudden lockdown to manage the business continuity. With awareness at an all-time high on the need to go digital and online, Government has to incentivise technology adoption drive for all sizes of business in the near term to build resilience for managing possible second/third waves. The government also needs to take technology investments to overdrive mode for enhancing productivity, transparency and efficacy of its interface with business and people. Initiatives like 5G rollout needs to be fast-tracked with special focus around areas such as cybersecurity, AI, ML, IoT, Analytics, block-chain, etc. for a sustainable recovery with a view to keep India ahead in the coming years."