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The Union Budget presented on Thursday has certainly created an air of confidence around the outlook for the future from an industry perspective. As a representative of the e-commerce sector, which is largely dependent on digitalisation, it was encouraging to witness the government’s emphasis on the same. With double the allocation for Digital India, the government is clearly committed to improving accessibility across the country, which is a stepping stone in the direction of connecting the whole nation, further boosting trade and commerce.
With a decision to set up 500,000 Wi-Fi hotspots providing broadband access to 50 million rural citizens, a digitally-connected economy would not only put the country on a path to scaling greater heights, but also strengthen the industry. Moreover, it offers sectors such as e-commerce that have a large customer base in tier-II and -III towns and villages, the much-needed impetus to penetrate deeper into the remotest pockets.
Talking of specifics, the proposal by the Finance Minister on the use of blockchain technology — to ensure credibility and safety of digital transactions — will certainly encourage a large section of the society to go digital and give a fillip to businesses in the long-run.
The Finance Minister has described infrastructure as “the growth-driver of the economy”. Significant investments in roadways (9,000kms new highways), railways (3,900km track renewal in FY19) and airports will help any organisation that manages a supply chain. This will also boost demand for the e-commerce industry and enable it to become more seamless and efficient from the logistics standpoint.
The allocation to the textiles sector to the tune of Rs 71.48 billion will bring cheer to a large section who are directly or indirectly dependent on the same, while also helping e-commerce businesses dealing in fashion and apparel, such as ourselves. I’m confident that the government’s measures to improve the standard of living of traditional weavers and craftsmen will be successful.
With industries looking at AI and allied technology in a big way, the NITI Aayog’s plan to establish a national programme to direct efforts towards Artificial Intelligence/Machine Learning and Big Data, including research and development of its applications, will place India on the cutting-edge of technology.
The proposal to implement corporate tax at the rate of 25 per cent for companies with revenue of up to Rs 2.5 billion will certainly have a good impact on medium-sized enterprises that comprise a large bulk of suppliers to the industry. The MSME sector getting Rs 37.94 billion in the form of capital infusion and interest subsidy will be another booster.
However, there has been an increase in customs duty on certain segments such as footwear, cosmetics, watches, toys and more, which is sure to put pressure on brands. Another area of apprehension is angel tax, which found no mention in the Budget.
Overall, it has been a positive Budget, with a focus on inclusive growth. The government will have to ensure that the schemes and policies outlined in the Budget reach the last mile as early as possible and achieve the desired results. This year’s Economic Survey had projected India’s e-commerce market to be $33 billion, growing by 19.1 per cent from 2016-17. With this forward-looking Budget, we expect the sector to grow at a fast pace.
The writer is CEO, Myntra-Jabong