In his maiden Budget speech, Finance Minister Arun Jaitley proposed schemes like setting up smart cities, taking internet to rural areas, to promoting start-ups and virtual classrooms in the social media-savvy government's efforts to bridge the divide between "digital haves and have nots".
The Minister proposed an allocation of Rs 7,060 crore in the current fiscal for developing 100 'smart cities'.
"The Prime Minister has a vision of developing 100 smart cities as satellite towns of larger cities and by modernising the existing mid-sized cities. With development reaching an increasingly large number of people, the pace of migration from the rural areas to the cities is increasing," he said.
Welcoming the government's focus on the ICT sector in the Union Budget, IT-ITeS industry body Nasscom, said: "The announcements on a pan India digital initiative, funding for start-ups, district level incubator network and leveraging technology for good governance are welcome steps."
Networking giant Cisco said the announcement will give the firm an opportunity to play a deeper role in India's transformation. Its President Sales (India and SAARC) Dinesh Malkani said Cisco has worked on over 100 projects globally and is optimistic about working in India as well.
Besides, to encourage development of smart cities, the requirement of the built up area and capital conditions for FDI will be reduced from 50,000 sq m to 20,000 sq m and from USD 10 million to USD 5 million, respectively with a three year post completion lock in.
Under the pan-India 'Digital India' programme, Rs 500 crore will be invested for setting up broadband network in villages, bringing in greater transparency in government processes and increasing indigenous production of IT hardware and software for exports and improved domestic availability.
On the policy front, Nasscom President R Chandrasekhar told PTI: "Government has addressed many key concerns raised by us on transfer pricing issues. The APA rollback, usage of multi-year data for benchmarking and among others should help to improve the business environment in the country."
However, there are certain areas of concern, which could be addressed through guidelines and/or clarifications like those related to royalty definition, Place of Provision of Service Rules, etc, he added.
TCS CEO and Managing Director N Chandrasekaran said the government has strongly signalled that one will see lot more reforms across sectors shortly.
"This is a positive start to a long term process," he added.
The government has proposed a National Rural Internet and Technology Mission, which will focus on IT skills training, while a programme for promoting good governance will receive an allocation of Rs 100 crore.
An initial sum of Rs 100 crore will be allocated to set up a technology development fund to provide resources to public and private companies including small and medium enterprises (SMEs), academics and scientific institutions to support R&D of defence systems using technology.
Besides, investments will be made to connect smart cities with industrial corridors, which will be coordinated by the National Industrial Corridor Authority, with its headquarter in Pune. Rs 100 crore has been allocated for this programme.
Jaitley also proposed to allocate Rs 100 crore to set up virtual classrooms.
IT industry and analysts have given a thumbs up to the government's budget proposals.
IT hardware industry body MAIT President Amar Babu said MAIT welcomes the long pending correction of inverted duty structure. Also, some telecom products (non-ITA) have been made liable to 10 per cent basic customs duty whereas all goods required for manufacture telecom products would continue to enjoy exemption from basic sustom duty.
It will help boost domestic manufacturing, he added.
Chipmaker AMD said exemption on all components used in the manufacture of personal computers from 4 percent special additional duty (SAD) would help revive the subdued demand and promote domestic manufacturing in the country.
Welcoming the budget, Microsoft India Chairman Bhaskar Pramanik said: "I see this budget setting the stage for higher growth on strong fundamentals of manufacturing and infrastructure sectors, built on the backbone of technology."
Tech Mahindra CEO and MD C P Gurnani added the only way forward for IT industry is collaborate, connect and co-create and this thought seems to echo by the government as well.
Welcoming the steps promoting local PC manufacturing, Intel South Asia VP (Sales and Marketing) Debjani Ghosh said this will provide a much needed boost to domestic ecosystem.
Blackberry India Managing Director Sunil Lalvani said these are positive signs that will transform the standard of healthcare, education and urban living, as IoT becomes a reality. Also, domestic manufacturing will receive likely boost as the government enhances focus on this sector.
NEC India Managing Director Koichiro Koide gave a thumbs up to allocation of Rs 7,060 crore to set up 100 smart cities and modernising satellite towns and an additional allocation of Rs 3000 crore towards modernisation of police departments.
Gartner India Research Director Arup Roy said the focus on MSMEs with various schemes is a huge positive and is likely to have positive impact on IT industry.
KPMG India Partner-Tax (IT/ITes) Naveen Aggarwal said the broadband connectivity at village level, integrated e-based payment gateway for government services will create opportunities for the sector.