With the releases of the Union Budget 2023-24 on February 1, India is expected to become even more tempting as an investment site in these geopolitically volatile times. The advancement of the information technology industry is likely to play an important role in reaching this goal. According to a recent Gartner forecast, information technology investment in India would expand by 2.6 per cent in 2023, led mostly by a high 13.7 per cent increase in software industry spending.
The Indian government is likely to utilise the next budget to stimulate the Indian economy in the face of global slowing and rising prices. The $3.2 trillion economy expanded 6.3 per cent year on year from July to September, more than half of the 13.5 per cent expansion seen in the preceding quarter. Given that the Indian economy has begun to recover from the fiscal consequences of the Covid-19 pandemic outbreak, startups in the software services sector are optimistic that the current government will focus on designing a fiscal budget that encourages economic growth and aligns with taxpayer expectations.
The sector also anticipates that the government will support more company digitalization and 100 per cent made-in-India software products. In that regard, expanding the angel investor pool at the seed stage for Indian start-ups, as well as offering a double-digit tax relief incentive percent of the cost of equity shares, will go a long way toward supporting startups during a year that is expected to be difficult due to all of the global forces at work.
Priya Ranjan Panigrahy, CEO and Founder of CEPTES Software, says “ the Digital India Program is a great initiative for companies like start-ups, SaaS-based and new-age companies. We are creating the SMB booster program in the cloud space which enables small businesses to get into the digital transformation very quickly without much hassle, which can take care of sales, service, and marketing automation and also connect to finance operations like automatic e-invoice and automatic billing solutions can be done. We also do KYC solutions which can be so easy to adopt.
- The budget will be focusing on measures that support growth and innovation in the software and SaaS industry.
- Support for the development and adoption of new technologies such as cloud computing artificial intelligence, machine learning, and the Internet of Things.
- Technology Clusters in Tier 1 cities in India; while there are IT talents in every corner of India they are forced to move to Tier 1 cities. As a result, big cities are enduring infrastructure issues. Govt. must come up with a special budget for booming IT infrastructure in Tier 2, or Tier 3 cities, as well as to take off the load from big cities.
- Measures to address the skills gap in the IT industry and support for training and upskilling of workers.
- Tax incentives for companies that invest in research and development.
- This year’s budget may also include measures to address concerns around data privacy and security, as well as efforts to increase the adoption of digital technologies in various sectors.”
Also Read | Union Budget 2023: What leaders from the BFSI sector expect?
Raj Sivaraju, President of APAC, Arete, stated that, “India’s economy is rapidly advancing and will play a significant role in boosting the global economy. The country’s technology industry will attempt to identify the cybersecurity investment necessary for the tech sector as the government is scheduled to propose its budget for FY2023–24 in a few weeks. With the rapid implementation of technology initiatives and programs, the lowering of administrative backlog, and inclusive development in 2023, the cybersecurity industry is expected to generate US$2.37 billion in revenue. Security Services is the market’s biggest category, with a US$1.19 billion market volume anticipated in 2023. By 2027, the market is projected to generate revenues with a compound annual growth rate (CAGR) of 14.61 per cent, amounting to US$4.09 billion. The country’s IT industry will closely monitor the spending on requirements for digital public infrastructure, capability building, and incentives for enhancing cybersecurity services.”
The upcoming budget will undoubtedly play an important role in enhancing the country’s worldwide economy. Technological innovations and implementations want to concentrate on Software-as-a-Service and cloud technologies. These technology advances may increase the security services market not just in Tier 1 cities, but also in Tier 2 and Tier 3 cities.
Ravindra Katti, Founder and Director of Techpartner Alliance, “Industry players in the new-age tech start-up ecosystem are looking forward to additional funding for growth and a tax breather from the government for the coming year. If more funds and credit facilities are provided for technology adoption, IT and Cloud infrastructures, and upgradation, this will go a long way for home-grown startups.
More focus should be on facilitating data center setups that are more environment-friendly and require well-defined infrastructure in terms of accessibility like roads, power, and other aspects. Any factor that can impede this space needs to be addressed, like some archaic and unrelated laws.
More start-up-friendly policies and tax breaks in GST and TDS are required and welcome too, especially with economists warning of the imminent recession. Government should also focus on and support skill development to further increase employability. As we know this industry brings in huge capital and we with our talent pool can do wonders here.”
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