- The Union Budget for 2017 was announced on February 1
- Finance Minister Arun Jaitley’s Budget had a focus on technology
- Digital payments are being strongly encouraged in this budget
In the Union Budget 2017, Finance Minister Arun Jaitley made several important announcements related to technology, affecting consumers as well as corporates. These include service charge waivers for online train tickets, boosts for digital payments, and a new online education platform. Along with these, Budget 2017 emphasises on ‘Bharat,’ with schemes and plans targeting villages and the poor. Here are all the key Budget 2017 highlights related to the technology industry.
Budget 2017 highlights:
- No service tax on digital rail bookings – The Finance Minister announced in Budget 2017 that tickets booked via IRCTC will not have any service tax charged. This was earlier announced as a temporary measure, but now this will simply become the norm.
- Hardware and software changes for Metro – With Budget 2017, the Metro rail policy will change to include standardisation and indigenisation of hardware and software, which will also create jobs.
- Spectrum scarcity not a problem any more – The FM also said that the recent spectrum auctions have removed spectrum scarcity in the country.
- BharatNet optical fibre rollout in Budget 2017 – BharatNet Project has been allocated Rs 10,000 crores in Budget 2017, said FM Jaitley. He added that optical fibre cable (OFC) has been laid in 1,50,000km. By the end of 2017-18, high-speed broadband on OFC will be available in more than 150,000 gram panchayats, with hotspots and access to digital services at low tariffs, he said.
- The digital village – The Finance Minister also talked about a new initiative called DigiGaon. This initiative will be launched to provide tele-medicine, education, and skills, through digital technology.
- Manufacturing announcements in Budget 2017 – Remarking that a number of mobile manufacturers have set up in India, the FM said that the government is creating an ecosystem to make India a global hub for electronics manufacturing. He said that over 250 investment proposals have received in the last 2 years – totalling an investment of Rs. 1,26,000 crores. “I’ve therefore exponentially increased the allocation of schemes like mSIPS and EDFs to Rs. 745 crores in 2017-18 – an all-time high.” Mobile phones are set to become more expensive as well, with customs duty on populated printed circuit boards used in the manufacturing of mobile phones being hiked from zero percent to 2 percent.
- Easier foreign investments – The FM also said the FIPB (Foreign Investment Promotion Board, which offers clearances for FDI) is to be abolished with Budget 2017. Further liberalisation of FDI being worked out.
- Digital pension system in Budget 2017 – The FM also announced a digital pension distribution system for retired defence personnel will be established, for easier access to their funds.
- Cyber-security for financial systems – The FM also said cyber-security is critical for safeguarding the integrity and stability of the finance system. To that end, a computer emergency response team (CERT-Fin) will be established for the financial sector – and will work in close coordination with financial sector regulators and other stakeholders.
- BHIM gets new schemes – Stating that the BHIM app will help with payments and financial inclusion, the FM revealed that 125 lakh people have adopted the system. The government will launch two new schemes with Budget 2017 to promote use of BHIM – referral bonus scheme for individuals, and cashback scheme for merchants. Steps would be taken to promote and possibly mandate petrol pumps, fertiliser depots, municipalities, block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments like the BHIM app, the FM said. A proposal to mandate all government receipts through digital means beyond a prescribed limit is also under consideration, Jaitley added.
- Digital payments to be encouraged in Budget 2017 – Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly, Jaitley said. A mission will be set up with a target of 2,500 crore digital transactions for FY 2017-18 through UPI, USSD, Aadhar Pay, IMPS, and debit cards, the FM said. Banks have targeted to introduce additional 10 lakh new PoS terminals by March 2017. Banks will be encouraged to introduced 20 lakh Aadhaar-based PoS terminals by September 2017, he said. Digital payment infrastructure and grievance handling system shall be strengthened, he added. Focus will be on rural and semi-urban areas through post office, fair price shop, and banking correspondents.
- Digital education – The FM also proposed Swayam, an online education platform, or Massive Open Online Course (MOOC) that would help people to build skills and gain employment. Swayam was first talked about in 2014, and a pilot program started in August 2016. Jaitley said access to Swayam would be widened by linkage with DTH channels, dedicated to education.
- Aadhaar smart cards for senior citizens – The FM also announced Aadhaar-based smart cards in Budget 2017, with health and other details stored on them to be introduced for senior citizens. A beginning will be made through a pilot in 15 districts during 2017-18. This is supposed to help with hassle free access to healthcare, though it’s not really clear how linking Aadhaar would help in this scenario.
- Infosys and TCS to support cooperative banks – As part of the Budget 2017 updates, the FM also said that the government plans to rope in Infosys and TCS to provide core banking support to cooperative banks.