Jaitley's pre-Budget meeting with IT sector on Jan 14

Underlining the government’s push towards e-governance, domestic electronics manufacturing, and innovation and entrepreneurship, Finance Minister Arun Jaitley has invited captains of Indian software firms as well as their counterparts in the hardware segment for pre-Budget consultations. The meeting, scheduled for January 14, will also be attended by CEOs of several e-commerce companies and prominent start-ups.

According to officials in the know, Prime Minister Narendra Modi pushed for the meeting given the government’s focus on e-governance, Make in India and driving innovation. Invitations for the meeting have been extended to Sachin Bansal of Flipkart, Naveen Tewari of inMobi, Francisco D’souza of Cognizant, Anant Gupta of HCL,

R Chandrasekhar of Nasscom, and Sharad Sharma of iSpirt, which represents start-ups, among others.

That never before have any start-up sector associations or firms been invited to such sessions signifies the attention these firms are getting in the government’s decision-making process.

The focus of the meeting will be “Make in India” to promote domestic manufacturing and e-governance. “The ministry is aware that IT can contribute immensely to the Prime Minister’s Make in India drive,” said an official.

However, it is learnt that the IT leaders are keen to discuss a number of issues, including regulatory and tax challenges of technology start-ups and small and medium entrepreneurs along with policy revisions and clarifications for expansion of the sector.

“There are two visions of India. One is the old vision that India is a back-office of the world. From that aspect, important issues that need attention are visa and transfer pricing. The new vision is that India is going to be the product nation. Why can’t we also build defence equipment and software products and become a player like China?” said Sharma, who would be attending the meeting. For this new vision three factors - level-playing field, prevention of exodus of tech start-ups, and becoming a market maker for products — are important, he added.

Pre-Budget consultations have already been held with state finance ministers and industry bodies.

In a pre-Budget recommendation note, Nasscom said, “The emergence of a rapidly-growing ecosystem for innovation; driven by young, tech-savvy entrepreneurs is a powerful new complement to the existing global reach of the industry. The SMEs (small and medium enterprises) and technology start-ups need an environment of constant nurturing including access to funds, incentives to support operations and a simplified compliance framework. On the other hand, large enterprises require stable policies and predictable regulations to continue its global journey.”

Nasscom also said to encourage the growth of e-commerce, taxation on digital transactions should be at least on par with the physical world. This will help government leverage the inherent transparency and traceability of online transactions. Another recommendation towards promoting the Make in India campaign is that if incentives are extended to industry for adoption and implementation of IT tools for efficiency enhancement, it could ensure sustainability and global competitiveness for the success of Make in India.

The finance ministry is also set to meet the trade unions, economists, and banks & financial institutions on January 10, 13 and 15, respectively. The meeting will be attended by Jaitley along with his key team of policy makers, including the revenue secretary, chairman of Central Board of Direct Taxes, commerce secretary, and finance secretary.