All eyes are now waiting for revealing the Union Budget 2017 in the Parliament on today. India is riding high on anticipation for what changes will the finance minister Arun Jaitley introduce to the existing system. After Prime Minister Narendra Modi’s demonetization scheme (which was a big fiasco), the finance minister is likely to go soft in introducing drastic changes.
Major changes in the taxation scheme are likely to be avoided as the GST is about to start in July. Along with the relaxation in the income tax slabs, consumer electronics and IT sectors are expecting some good news from the Union Budget 2017.
It is observed that Smartphone are increasingly used for accessing the Internet. One way of cashing in this steady growth is by offering more incentives to the existing users. Another way is to add more number of users by facilitating sales of the Smartphone and providing cheaper Internet facilities.
It is expected that the government will lower the tax on the lower-end smartphone segment with the Union Budget 2017. This will aid in generating more revenue while providing a boost to the Digital India dream.
The government is also trying its best to boost the “Make in India” Imitative by rewiring the policy to manufacture smartphones in India. This would allow companies like Apple to set up their own manufacturing units in India which will surely reduce the cost of Smartphone while promoting employment opportunities.
Apart from cutting costs of lower-end Smartphones, the government is planning to reduce or limit additional tax in the telecom sector. Currently, consumers have to pay a service tax of 15% on services availed from the telecom operators. After the implementation of GST this year, any changes in this taxation scheme would increase the cost for the subscribers and the entire telecom industry. The time when government is promoting its ‘digital India’ vision, the government will avoid any tax increase that might increase the cost for the subscribers.
As far as the consumer electronics industry is concerned, the sector is highly optimistic about the union budget 2017. Within the demonetization period, there was chaos in the market due to the limiting buying power of the consumers thus affecting the consumer electronics industry. So, the industry is now looking forward to interesting incentives by the government in order to stabilize the market and realign the growth cycle. Additionally, the government is also likely to provide relaxation in the indirect tax so as to ease the after effects of demonetization.
Furthermore, the IT industry is expected to get more rebates on telecommunication equipment. Provisions are likely to be made to boost the startup sector and create jobs opportunities by facilitating the growth in software industry.