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  • Sandeep Ladda - Partner and  Leader (Technology & e-commerce), PwC

    Sandeep Ladda

    Partner and Leader (Technology & e-commerce), PwC

    DATE: January 30, 2017, 11:45 AM

    SUBJECT: What is required from Budget 2017 to give the IT and e-commerce sector the boost it needs?




    Hello and welcome to a webchat with Sandeep Ladda, Partner and Leader (Technology & e-commerce), PwC. We will be discussing what is required from Budget 2017 to give the IT and e-commerce sector the boost it needs


    Hello, everyone

  • A


    Hello. Following are my suggestions for the required boost. Please give your take on them. (i) Linking of Universal Basic Income (UBI) as a percentage of merchant digital payments, subject to lower limit and upper caps. On a lower limit, you get a prefixed UBI but to get the upper cap, you have to spend digitally (household electricity bill, grocery, milk, etc) (ii) Tax incentives for AADHAAR-enabled payment machines and related internet/telecom service infrastructure to make them affordable even to a grocery shop whose annual turnover is less than Rs 2 Lakh (iii) Bringing more Public Distribution Outlets in the purview of AADHAAR-enabled systems and tax incentives for manufacturing and maintaining related infrastructure (iv) Biometric-enabled driving system to ensure no person can drive a vehicle whose AADHAAR Biometric Details are not linked to a valid driving licence. This will require every vehicle to have inbuilt or external bio-metric reading device which will require touch at regular interval to keep vehicle running (v) Allotting digital identity to all properties (like our own house/flat/land, etc) and creation of demat repository of properties. If this happens, in future we can sell/buy property through AADHAAR authentication without requiring any manual intervention.


    While some of the points made here are good in terms of incentivizing more digitisation of the Indian economy and some of the above suggestions can be considered by the Government. However, UBI may not necessarily be a well researched concept as of now. And such a significant step, with little proof of concept, could have the potential to backfire in a market like India where the population demographics are vastly different from other countries where UBI is being explored.

  • S


    How successful has Start-up India been? Can we see another initiative specifically for IT sector?


    India is one of the largest startup ecosystem in the world - due to lot of innovation and entrepreneurship. Also, government's initiatives around Digital India and Start-up India, however, there is lot more to be done around simplification of government machinery and single window online approvals, etc. From expectation perspective, R&D and innovation incentive should be extended to IT-ITeS companies engaged in R&D activities.

  • P


    To aid the everlasting cash pool requirement of e-market entrants, can the FM look at amending provisions for exempting applicability of withholding tax (TDS) on payments received by e-commerce companies in various forms of commission, service charges, rentals, etc, that are retained by traders or manufacturers?


    The above recommendations can provide filip to the eCommerce sector. Definition of who can avail this incentive (eCommerce / Internet businesses) should be articulated acutely so as to avoid confusion and provide clarity to the various constituents in the ecosystem

  • R


    According to reports, the market grew 30% between Dec 2011 and Dec 2015 and was valued at Rs 1,25,732 crore by the end of Dec 2015, led by the online travel industry which accounts for 63% of the overall share. What's your take on this


    Indian eTail and Online Marketplace segment continues to grow at a significant double-digit pace every year, taking share from physical retail stores bit by bit and also growing the overall pie. By 2020, online shopping will account for two-thirds of the total e-commerce market, edging out travel; and fashion and lifestyle segment will emerge as the largest e-tailing category.

  • K


    The current vision of digitising India and the recent demonetisation move have opened the door to many new ideas, especiallly for payment solutions and related technology back-up products. Can we expect the introduction of weighted tax deduction on capital investment or tax breaks, including non-levy of minimum alternate tax, in order to incentivise such players?


    The tax incentives should be directly linked to digital mechanism as a mode of payment and receipt. The more these mechanisms are put to use, better should be the incentive. The above suggestions may not be directly linked and may be difficult to implement.

  • P


    Can we expect the FM to look at providing clarifications on tax treatment in a digital economy? That will help reduce frivolous cases and also release the ever mounting pressure on tax Tribunals / Courts in disposal of pending cases?


    On Indirect tax front, the current VAT (goods) vs Service tax (services) ambiguity should get addressed under GST. Thus, while there are separate clarifications provided on the tax treatment under the Budget 2017 or not remains to be seen and will only provide a short term solution, a clear roadmap for GST implementation remains the most critical expectation of Digital India from the FM.

  • S


    According to reports, the volume and average value of transactions is higher for credit cards than debit cards. Is there a cue there that the e-commerce industry can take, especially with the government's drive to increasingly make the economy cashless?


    The government's announcement to use BHIM and promote UPI will further the cause to digitize India. And with the increased issuance of cards, usage at PoS is gaining traction which will boost the growth of digital payments and help in the growth of the eCommerce industry. However, challenges around card acceptance ecosystem in rural areas, connectivity issues, issues around low-value transaction should be addressed by the government ASAP.

  • T


    After Donald Trump's US immigration ban, how can the govt provide relief to the IT sector?


    It is true that in todays global scenario, any policy changes in one part of the world could have a ripple effect, however, the expected moves of the US government around the IT sector are speculation. Thus, while possible impact of the same on India IT can be deliberated upon and might have an impact on mobility of IT specialists, any incentive or policy change by the Indian Government can only be brought about once the said policies (overseas) are implemented and impact of the same is analysed and understood.

  • O


    Do you think the regulations for the e-commerce sector are sufficiently relaxed, or should govt can do something more about it?


    While the Governments relaxation to FDI in e-Commerce was a welcome move and definition of marketplace has helped to bring clarity, further specific relaxation on the count of 30% domestic sourcing criteria could be helpful to overseas players. Additionally, Government could consider opening up FDI window - even if partly - for inventory based models as well.

  • K


    Recent reports suggest that spending on data security has been increased marginally compared to last year, even as the number of data thefts increased significantly. What could be the probable reason and how can it be curbed?


    The previous year saw large enterprises increase their security budgets to enhance their security programs...also true with several mid-tier organizations. The current year also saw mature organizations focusing on advanced capabilities around security operations and incident response, and limiting their spend on setting up newer security systems. Furthermore, several organizations in India have started focusing on the people and process elements with effectively training their employees and having proper systems in place, instead of having a pure technology centric approach to their security strategy.