Union budget 2022: What it has for IT sector and telecom?
Though Union Budget 2022 is described as an average budget for the IT sector as of the very few direct benefits. Let’s look at what the budget has proposed for this industry in detail.
The Union Budget 2022-2023 presented by FM Nirmala SItharaman is considered to be an average budget for the IT Industry. Restricting the deduction u/s 10A/10B to 90% is definitely not a supportive action. Investments that have been made based on this premise would be affected. Although 10% of the profits being taxed is not so significant, it definitely sends a signal of uncertainty in relation to the quantum of the deduction for the subsequent years.
Let’s look at some key points that will impact IT Sector in some ways –
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5G spectrum auction to be conducted this year for the rolling of 5G services –
Though this is a direct announcement to the private telecom industry, 5 G will be acting as a catalyst for India to look towards developing a high-tech ecosystem indigenously. The IT company’s share prices are expected to rise with the establishment of 5G services in India.
5G technology will enable large-scale IoT with ultra-low-latency wireless connectivity in the industrial sector. This will allow manufacturers to work smart manner.
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Contract for laying optical fiber network across all rural areas –
Union Budget 2022 has announced -“Contracts for laying optical fiber in villages to be awarded under BharatNet project under PPP in 2022-23”. BharatNet Project is said to be the world’s largest rural broadband connectivity program that is using optical fiber.
BharatNet is implemented by Bharat Broadband Network Limited (BBNL). It is to digitally connect all the Gram Panchayats (GPs)(around 2,50,000 ) and Villages of India(approx 6,40,000) in India.
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Datacenter, Energy Storage System to be given infrastructure status –
Finance Minister Nirmala Sitharaman said in the Union Budget announcement on Tuesday – “Data Centers and Energy Storage System will be given infrastructure status to provide easy financing to this sector”.
FM further said that private equity and venture capital investors invested Rs 5.5 lakh crore in startups. An expert committee will be set up for suggestions for measures to attract more investments. There will be measures taken to step up private capital in the infrastructure sector, Sitharaman added.
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Digital currency, leveraged on Blockchain to be issued by Reserve bank of India-
Union Budget 2022, at least has removed much negative of Cryptocurrency in the country. As the budget has announced to set up its own Digital Rupee, leveraged on Blockchain technology. This digital rupee will be issued by RBI(Reserve Bank of India). This step will ultimately give a big boost to the economy. This can provide a cheaper currency management system.
Other announcements include -Tax on Virtual digital assets. As it will launch a scheme for the taxation of virtual digital assets. Income from virtual digital assets to be taxed at 30%, will be implemented.
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Startup to be promoted –
Existing tax benefits for startups, which were offered redemption of taxes for 3 consecutive years, to be extended by 1 more year, as per Union Budget 2022-2023.
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Deep Tech –
Deep tech is an idea whose time has come. All our focus so far has been on the application layer which provided solutions to problems and business opportunities. A focus on deep tech will provide that strategic depth. Wish the government expands and extends this, said by P N Sudarshan, Partner and TMT Leader, Deloitte India, as per sources reported.
Deep Tech- technologies focused on artificial intelligence(AI), robotics, blockchain, advanced material science, photonics and electronics, biotech, and quantum computing. This technology differs from end user-centric technologies.
