Mobile banking will fuel the overall growth of mobile industry | Budget 2017

Currently, India is not only the fastest growing smartphone market in the world, but has also surpassed the USA to become the second largest, after China. Further India has registered strong growth in the past decade and half and is extensively contributing to India’s Gross Domestic Product (GDP). More so, post demonetization, India is quickly moving towards digital economy and mobile banking for which smartphones will play a crucial role to support the overall vision of a cashless economy. The entire country is looking forward to mobile banking which will create a new user base and fuel the overall growth of mobile industry.

India still has a long way to go as the smartphone penetration of the total potential population is still below 50 per cent of the overall market size, hence it is important that Government enables further acceleration of growth of smartphones. Post-demonetisation Government can look at rationalizing tax rates or changing the tax slab in a manner there more disposable income in the hand of people. This will lead to overall increase in consumption and growth in telecom industry.

In the slew of announcements made by the government in 2016, the Goods and Services Tax (GST) was a ray of hope in an otherwise under-penetrated market. The Government should positively aim to introduce the much awaited and hyped GST at the earliest as it will significantly increase efficiency and ease of doing business. With its impending implementation, the upcoming budget should detail out steps for its successful rollout at the same time give clarity on custom duty / excise duty on mobiles post GST roll out.

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With the government’s favorable regulation policies and 4G services hitting the market, the Indian telecommunication sector is expected to witness fast growth in the next few years. The determined ‘Digital India Initiative’ of the Government of India will help boost India’s Gross Domestic Product (GDP) by US$ 550 billion to US$ 1 trillion by 2025 (as per research firm McKinsey), making India a significant manufacturing destination. As an industry player, we are expecting a long-term and stable policy on mobile manufacturing in India. Further policy directions are also awaited on the manufacturing linked incentives.

The ambitious ‘Make in India’ program saw manufacturing emerge as one of the highest growth sectors in the country. In the last 2 years we have already seen major global smart phone manufacturers set up base in India. The government can now further work upon directionally establishing and strengthening the component ecosystem in India to further enhance manufacturing value chain in India. World over, the electronics industry is increasingly looking for newer pastures to set up their manufacturing units, and we see India becoming a favorable choice.

Throughout the last few years, rural India witnessed many extraordinary changes. PC penetration is one such welcome addition which actually improved the lives and the lifestyle of many rural inhabitants. However, the India’s current computer penetration in rural areas is remarkably lesser than its fellow countries. To carry forward the Prime Minister’s vision of “Digital India”, the government should consider special incentives and taxation benefits on the entry consumer PC segment below Rs. 20K.

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Lastly, India is a fast growing economy, ripe with opportunity. The perception of investors has also changed for the better, over the years. The upcoming budget should include provisions that create a favorable environment for them while making it easier to conduct business in order to help elevate the country’s status on a global scale.