Budget 2018: Ensuring BFSI Transformation Through Innovation

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Arun JaitleyWhile presenting his last full budget before the 2019 Parliamentary elections, Union Finance Minister Arun Jaitley talked of several structural reforms already undertaken and underlined significance of new emerging topics such as AI, cryptocurrency and Blockchain and mentioned about importance of indirect tax system, GST. Elets News Network (ENN) sought to check the industry’s pulse after it.

Jaitley talked about the personal income tax collection generated from the salaried class, as he said: “For assessment year 2016-17, 1.89 crore salaried individuals have filed their returns and have paid total tax of Rs 1.44 lakh crores which works out to average tax payment of Rs 76,306 per individual salaried taxpayer.”

Although there was no change in the personal income tax slab, in the Union Budget 2017, Jaitley had announced 25 per cent reduction in the income tax for companies whose turnover was lesser than 50 crore in financial year 2015-16.

It also made an interesting reading to see how the Narendra Modi Government’s Budget 2018-19 provided a boost to the country’s digital economy, allocating Rs 3,073 crore for the “Digital India”. This programme also includes a big chunk of the Banking and Finance sector.

In his budget speech in Lok Sabha, Jaitley announced a national programme on Artificial Intelligence (AI) to be administered by NITI Aayog. Another programme on “Cyber Physical Systems” has been proposed to support establishment of Centres of Excellence under the Department of Science & Technology.

“These centres would be facilitating research, training and skilling in Robotics, Digital manufacturing, Big Data analysis, Quantum communication and Internet of Things (IoTs),” a statement released by the Ministry of Finance said.

Reacting to latest budget, QualityKiosk CEO & Founder Maneesh Jhawar said the Budget 2018-19 is “ambitious in establishing India as a knowledge-driven digital society, riding cutting edge technologies of machine learning, AI and IoTs”.

SBI General Insurance MD & CEO Pushan Mahapatra said the move would make adoption of algorithms easier and reliable. “Advanced forms of Machine learning will take away a lot of manual work involved in Insurance operations. It’s not hard to imagine a more automated, customer-centric and cost-effective insurance operations in days to come.”

In another major boost to facilitate the Digital India programme, Jaitley announced allocation of a budget of Rs 10,000 crore in 2018-19 for creation and augmentation of Telecom infrastructure. Five lakh wi-fi hotspots have also been announced to provide net connectivity to five crore rural citizens.

According to Finance Minister, 2.50 lakh villages have already obtained optical fiber broadband connectivity under Bharat Net program. Furthermore, the Government plans to connect 1.5 lakh more villages under the programme, which is a collaborative project of the Centre and State wherein the former will contribute free Rights of Way for establishing the optical fiber network.

Also, Narendra Modi Government’s latest budget has provided a boost to the country’s digital economy, allocating Rs 3,073 crore for the “Digital India”, a flagship programme aimed to transform the nation into a digitally empowered society and create knowledge-driven economy.

Launched by Prime Minister Narendra Modi on 1 July, 2015, the programme is both an enabler and beneficiary of other key schemes like BharatNet, Make in India, Startup India and Standup India.

The Programme has set nine pillars namely, Information for All, E-Governance, reforming Government through Technology, Electronics Manufacturing, Public Internet Access Programme, Universal Access to Mobile connectivity, E-Kranti, electronic delivery of services, Early Harvest Programmes, IT for Jobs, and Broadband Highway.

Meanwhile, cryptocurrency has been given a red signal with the Government maintaining that they can be a channel for money laundering and terrorist financing. Instead, the Government plans to use blockchain technology to curb its use.

Offering a relief to salaried class, the Minister proposed to allow a standard deduction of Rs 40,000. It is in lieu of transport and miscellaneous medical expenses intended to boost the take-home pay of the middle class.

Among other key announcements, the Finance Minister declared that fixed deposits and post office interest will be exempted till Rs 50,000. Other announcements included a slew of tax deductions for senior citizens, extending the Pradhan Mantri Vaya Vandana Yojana (PMVVY) till March 2020.

He also said the existing limit on investment of Rs 7.5 lakh per senior citizen under this scheme is also being doubled to Rs 15 lakh.

The Government is firm to achieve 8 per cent growth, stated the Finance Ministry in a statement, adding the GDP growth in the second quarter of 2017-18 stood at 6.3 per cent. The International Monetary Fund (IMF) has forecast India will grow at 7.4 per cent next year.

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