New Delhi: The Union Budget 2016-17 has given a big boost to the Digital India vision of Prime Minister Narendra Modi, said finance minister Arun Jaitley, which are expected to give a big boost to the ‘Digital India’ initiatives, digital literacy, greater application of cloud computing and, above all, a big push to the electronics manufacturing. The finance minister has also focused upon the larger involvement of post offices for financial inclusion, including delivery of services.
Before coming to the specifics of announcements in the Budget, it will be relevant to note briefly some of the key areas of profound change, which has happened in the last 20 months, the finance minister said while assessing his Budget.
- IT/ITeS exports have crossed USD 100 billion.
- India’s share in global IT services outsourcing presently is 56 %, which is growing every year.
- The total employment in IT/ITeS sector is 37 lakh in this financial year, out of which the net addition is 2 lakh.
- Electronics manufacturing has seen remarkable improvement due to the initiatives of this government. When this government came to power, in June 2014, the proposals worth of only 11,800 crores were received. Now, it has risen to 1,20,294 crores.
- Due to the initiatives taken up in the last Budget, especially the duty rationalization, we have noticed remarkable acceleration in the field of electronics manufacturing. In this connection, mobile manufacturing presents very encouraging area. In 2014-15, the mobile units manufactured in the country were 5.4 crores, which have more than doubled to 11 crores in 2015-16. After the duty rationalization in the last Budget, 16 new mobile manufacturing units have been set up in this financial year.
New incentives in this budget
Efforts made in the previous Budgets of this government for promoting electronic manufacturing in India has also got an encouraging boost during this Budget by further rationalization of the duty structure. As a result of this, the domestic manufacturers of routers, broadband modems, set-top boxes, digital video recorders, network video recorders, CCTV camera and lithium-ion battery will enjoy duty advantage of 8.5% vis-à-vis imported goods. Domestic value addition in mobile phone phones, battery, wired headsets/speakers will enjoy a duty advantage of 10.5% vis-à-vis imported goods. This will also encourage domestic manufacturing of components. Domestic manufacturing of routers and broadband modems will further encourage manufacturing of telecom equipments.
In the IT/ITeS (IT enabled services) sector, sunset date for Section 10AA of the Income Tax Act allowing tax benefits for IT units in SEZs has been extended from 2017 till 2020. This will enable technology units to set up and commence operations in SEZs.
A very significant incentive IS the extension of Section 80 JJAA to Income Tax Act for skill development to services companies as well. This will permit 30 % of additional wages paid to new workmen, deductible for 3 years. This will give a big boost to the BPO operations, which this government is pushing-in a big way.
Encouragement to digital literacy & digital lockers
We are happy to note that the finance minister has provided for creation of Digital depository of school leaving certificates, college degrees and mark-sheets. This will enhance the footprint of cloud technology in the country. The IT department has already laid down the framework for cloud technology and will assist in the expansion.
The Budget has given extraordinary expansion to digital literacy in the country, consisting of imparting digital literacy to 6 crore households in next 3 years. The IT department was keenly pushing for this expansion. As of now, against the target of 52.5 lakh, more than 40 lakh have been trained.
Use of Aadhaar platform for delivery of services
The finance minister himself, as announced In the budget, will be moving a legislation to give a statutory backing to Aadhaar, for delivery of services/ subsidies / benefits, corning out of Consolidated Fund of India. This will prevent leakages by identifying the beneficiaries correctly and will encourage good governance.
The minister is assured to note that in the budget speech, finance minister has laid great stress on the use of digital platform across various departments. This will further encourage consolidation of seminal programmes of ‘Digital India’.
FDI equity inflow in telecom sector has touched a new high during FY 2014-15, which is $2895 million which is 80% more than the FDI equity inflow received during 2012-13 ($304 million) and FY 2013-14 ($ 1307 million) put together.
Status of NOFN (BharatNet) as on 29 February
End June 2014
- OFC pipe laid is 2292 km
- Optical fibre laid is 358 km
As on 29 February
- OFC pipe laid is 1,24,797 km (51,616 GPs)
- Optical fibre laid is 96,597 km (41,086 GPs)
Reforms in postal department
The efforts to leverage the vast network of India Post for implementing the mandate of financial inclusion have received a renewed momentum from the Budget announcements. In May 2014, India Post had only 230 core banking branches offering anywhere banking services and only 4 ATMs. Today, it is a matter of great fulfilment that India Post has not only installed more than 576 ATMs but has also overtaken the State Bank of India to become India’s largest core banking network having 18,231 branches.
By March, all the 25,000 departmental post offices will be offering ‘anywhere banking’ facilities using core banking solutions. ATMs numbering 1,000 shall also be installed by 31 March 2016. This will imply that all post office savings accounts/certificates in all 1,55,000 post offices will come under core banking solutions.
As on 29 February, India Post has issued 1,26,181 ATM/debit cards to its account holders. It is also expected that by 31 March, 20,000 micro ATMs shall be installed across the country.
In e-commerce, its parcel revenues have witnessed a growth of 110% and it has collected more than Rs 1,200 crore from cash on delivery mode of payment for e-commerce services.