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Software majors hail SEZ scheme extension, digital plans

India's new Finance and Defence Minister Arun Jaitley speaks dur

Bengaluru: Software majors TCS and Wipro on Monday lauded Finance Minister Arun Jaitley for extending tax benefit to export units under the Special Economic Zone (SEZ) scheme till 2020 and the government’s Digital India plans in his budget for 2016-17.

“The FM has delivered a fiscally responsible budget.The extension of SEZ scheme till 2020 and reduced tax at 10 percent for global revenues generated by India-registered IPR (Intellectual Property Rights) will energise entrepreneurship,” Tata Consultancy Services (TCS) chief executive N. Chandrasekaran said in a statement from Mumbai.

Presenting the budget, Jaitley said the benefit of section 10AA to new SEZ units would be available to those units which commence activity before March 30, 2020.

On the budget proposal to use digital platforms to connect farmers with their ecosystem, Chandrasekaran said the technology-led plan would bootstrap the Indian heartland into the digital age.

“The plan to use digital technology from administering taxes to issuing secure education certificates is heartening. Jaitley has presented a forward-looking budget and I will give it 8/10 rate,” he added.

Terming the government’s response to the software industry’s representation on the sunset date on SEZ units positive, Wipro chief financial office (CFO) Jatin Dalal said its extension would be beneficial owing the gestation time taken to operationalise production units.

“I also applaud the efforts to increase the use of technology in e-governance and steps taken towards digital inclusion. I welcome the special patent regime, which will encourage research and lead to generation of IP in the country,” Dalal said in a statement here.

Manipal Global Education chairman and former Infosys director T. V. Mohandas Pai commended the government for incentivising the startup ecosystem through budget pronouncement.

“The government recognizes that startups can be powerful problem solvers for myriad issues facing the country and in turn generate jobs as well,” he said in a statement here.

The budget proposes to assist startups propagation through 100 percent deduction of profits for 3 out of 5 years for startups set up during April 2016 to March 2019, as they generate employment, bring innovation and are expected to be key partners in Make in India programme.

“Though there are no major sops in the budget for the software product industry, the government should understand that incentives to this (product) segment will result in an exponential leap in exports and place India in a strong position on the world software product stage,” Nucleus Software Exports Ltd managing director Vishnu Dusad said in a statement here.

Noting that the budget had not treated technology in isolation but integrated its effective use across strategic imperatives in keeping with the intent of a Digital India, chip maker Intel’s South Asia managing director Debjani Ghosh said Jaitley had focused on bridging the divide between the haves and have nots.

“The budget has laid emphasis on governance reforms and ease of doing business, while highlighting the need for enhancing educational skills in order to make India a knowledge-based economy,” she said in a statement here.

Disappointed over reducing incentives on R&D, Ghosh said sops were critical for India to be one of the most innovative countries and such a reduction could be detrimental in building the country as an innovation hub.

“I urge the government to re-consider this move, as any restriction on the R&D ecosystem is likely to decelerate innovation and restrain the ambitious Make in India and Digital India vision,” Ghosh added.


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