Finance Minister Nirmala Sitharaman takes stock of digital, fin sector issues
Chennai: Finance Minister Nirmala Sitharaman started her pre-Budget consultations with stakeholder groups from digital economy, fintech and start-ups on Monday. The minister also met the stakeholders of financial sector and capital markets as well as IT hardware and mobile manufacturers.
The main areas of discussion with those belonging to the digital economy were data-related issues like use of big data technology and its use for SME sector, analysing large data sets and unleashing the power of big data for public governance. Other issues which dominated the discussions included digital infrastructure and role of government as well as regulation of digital economy especially in privacy. Financial regulation, ease of doing business start-ups, infrastructure gaps for digital India and taxation issues were also discussed.
The representatives of digital economy, fintech and start-ups shared their views and suggestions regarding big data, incentives for encouraging setting up of data centres, fiscal incentives for data localisation, incentives for pushing digital penetration in rural areas and corporate guarantee to start-ups for competing with other nations.
Rationalisation of MAT tax rate, tax exemption for start-up units, creation of specific agency for looking after cross border financial crimes, increasing women employment, training youth in skill development along with international internships and incentivising research & development (R&D) within India also were discussed. The industry also suggested giving tax sops to start-ups.
Mobile manufacturers, during their meeting with the minister, sought clarity over recent reduction in export incentives and demanded rationalisation of tax structure, including GST rate on handsets. On December 7, the Directorate General of Foreign Trade reduced export incentives on mobile handsets from 4 per cent to 2 per cent.
"Many have emphasised that some schemes that are on the anvil can be brought in quickly, like some incentives for large-scale manufacturing," Electronics and IT Secretary Ajay Prakash Sawhney said after the pre-Budget meeting.
The electronics industry too was worried about subdued exports. "Exports in the electronics industry is highly dampened and have a negative impact on investments in this sector. Electronics exports will be hit hardest without MEIS. Reinstating the MEIS is the need of the hour for continued exports," MAIT Chief Executive Officer George Paul said.
The Electronic Industries Association of India (Elcina) demanded a dedicated fund for the development of component manufacturing ecosystem, which should be floated on the lines of a venture fund with income tax breaks on earnings.
In the meeting with the stakeholders from the financial sector and capital markets, issues like increasing credit off take from banks, governance changes in public sector banks and creation of a well-functioning bond market were discussed, among others.
