Budget 2018: Good for telecom industry

Overall budget is on expected lines as it will benefit domestic manufacturing, digital India infrastructure, MSME, ESDM and electronics sector

In digital infrastructure, the Budget 2018-19 announced a doubling of allocation on Digital India Program to Rs. 3,073 crore in 2018-19. Rs. 10,000 crore have been provided for creation and augmentation of telecom infrastructure. The government proposes to set up 5 lakh WiFi hotspots in 250,000 gram panchayats which will provide broadband access to 5 crore rural citizens and also focus on completing remaining 150,000 gram panchayats with broadband infrastructure. The Finance Minister informed that the Phase I of Bharatnet Project has already enabled broadband access to over 20 crore rural Indians.

For new technologies, the Department of Science and Technology will launch a Mission on Cyber Physical Systems to support establishment of centers of excellence for research in training and skilling in robotics, artificial intelligence, digital manufacturing, big data analysis and quantum communication. NITI Aayog will initiate a national program to direct efforts in the area of Artificial Intelligence. The government will take all measures to eliminate the use of crypto-assets in financing illegitimate activities and will also explore the use of blockchain technology for ushering in digital economy.

To harness the benefit of emerging new technologies, the Department of Telecom (DoT) will support establishment of an indigenous 5G Test Bed at IIT, Chennai.

Vishal Malhotra, Tax Leader, Technology, Media & Entertainment and Telecommunications (TMT), EY India says, “Overall, budget is on the expected lines. The proposal to treat foreign exchange gains/losses other than purchase of capital assets from outside India, as a revenue item, should benefit the telecom operators since presently, any foreign exchange losses on domestic procurement including purchase of spectrum is not tax deductible. Increase in customs duty on handsets to 20 percent should give a fillip to domestic manufacturing though this may increase the cost of imported handsets.”

Commenting on the Budget 2018, Hemant Joshi, partner, Deloitte India said, “Overall the Union Budget 2018 is good for the telecom Industry. The setting up of 5G center in collaboration with IIT Chennai would help India being early adopter of the next generation technology rather than being a laggard. This could be a boon for the telecom industry and guide the telecom operators to move to nextgen networks efficiently and effectively. This center could also work on development of Internet of Things (IoT) and Machine to Machine (M2M) applications which are relevant and best suited for India. India could take lead in setting up standards for next generation technologies, and in turn help in boosting Make in India initiative.

Rajan S. Mathews, Director General, Cellular Operators Association of India said, “We applaud the government’s vision and commitment towards Digital India and the Digital economy. We are also happy to see that the allocation of Digital India has been doubled and the government proposes to set up 5 lakh WiFi hotspots.”

Speaking on Budget 2018, Ashwini Aggarwal, Chairman, India Electronics & Semiconductors Association said, “The budget’s objective was to build on the evolving economic scenario with enablers for private sector investments. Announced MSME benefits augur well for the industry. Stated ESDM/electronics sector focus is good with various measures taken to make it easier to do business across sectors. With this, the industry hopes for appropriate kickstart packages to enable Make-in-India in this sector, we hope to see this in the fine print. Additionally, the provision for the development of 2 defence industrial production corridors in India, will boost indigenous manufacturing and make India more self-reliant for its defence needs.”

Overall, this year’s budget has raised the bar for the expectations of making India a self-reliant economy with the best set of skilled workforce and taking a huge leap towards being a global technology and manufacturing hub added Aggarwal.

N. Sudarshan, Partner, Deloitte India said, “Overall the budget has been encouraging for the technology sector, with a specific inclination towards greater localization and domestic consumption, and consequent indigenization. National Health Protection Scheme will entail significant technology investments, which could be catered to, very efficaciously, by the Indian technology sector already proficient in addressing this segment globally. The rich database and scope for analytics emanating from a successful project of this nature can provide valuable insights for public policy. Focus on improvements in efficiencies and productivity across varied sectors like agriculture, health, education, infrastructure, etc. are likely to spur development of indigenous and localized technology solutions.”

“While, the FM has emphasized the importance of moving to a digital economy, the actual digital highway, which is telecom has found no mention in terms of substantive support, unlike road, railway, highways, electricity, which have received substantial mention. We are saddened to see that telecom which is the bedrock for moving the digital economy forward, continues to remain an orphan,” added Mathews.

 

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