What the Indian IT Sector Expects from the Union Budget 2018 IT Infrastructure needs major incentives for growth

By Sumit Peer

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


Information Technology industry has been a ray of sunshine that has put India on the global map for all the good reasons. The Gartner report claims that we can expect growth in the IT spends by 4 to 4.5% in the coming year.

With the current wave of automation, digitization and growing awareness of the benefits of technology and e-commerce, the coming years are slated to be an exciting time for the technology industry and are expected to transform the way India and the world operates. Realizing the immense potential in the IT sector, the Government of India initiated programs like "Digital India', "Start-up India' to propel the growth story of IT industry.

With the fast paced developments in the IT industry, added with changing consumer buying patterns, the industry is going through a demand-supply gap. The industry is in dire need of complete re-skilling of the entire IT population. Another crucial facet of the IT industry is the application side of technology. This evolving aspect of the IT industry brings in immense opportunities, but requires a special attention for its optimal utilization.

Reduction of the Corporate Income Tax Rate

The Union Budget 2018 should provide incentives for infrastructure in the IT sector so that high level of technology and talent development can take place in the digital space. It can be seen that the proposed reduction of the corporate income tax rate to the slab of 25% has a long way to go in helping technology companies; especially those in the lower tax bracket range. With this reduction, companies falling under lower tax bracket can use more funds towards their product and business growth.

Increase in IT Budget Expenditure

IT sector will witness a big boost if the government could increase its budget expenditure for the development of smart cities. The Karnataka government has already designated INR 1,188 Crore for developing six smart cities, which will encourage other states to invest. Such projects are extensive and may take anything between 20 years to 30 years for completion. This further means that the industry will reap benefits for more than a decade. Any announcements on timelines around Smart Cities will be a welcomed opportunity for the companies focusing on the same. Gaining government's help and support at the policy level brings hope in ensuring various economic interests that would be beneficial for the industry.

Growth of the IT Sector in 2018

For better development and profit growths in IT sector, the government should focus on the issues related to POEM, service tax, tax refunds, etc. The IT industry representatives are looking forward to imposition on duties on various technology and telecom products which inherently fall outside of the purview of the IT agreement signed by India. This will lead to better development and profit growths in the IT sector.

Such moves will go a long way in boosting the IT and telecom manufacturing industry of the country. The IT sector itself is predicted to be bright for India. We have seen the S&P, Sensex and NSE Nifty, each rising over 30% in past year and it is expected that this Bull Run would continue in 2018 too. It is expected that Nifty will deliver returns somewhere in the range of 10 -15% by the end of December 2018 due to the immense support by the global IT industry.

In a nutshell, it is going to be a really good 2018 for the IT industry if not miraculous. We can expect some significant changes which will be reaped as benefits for the industry.

Sumit Peer

Founder and CEO, Aurelius Corporate Solutions

Related Topics

Business Plans

10 Simple Tips to Write a Successful Business Plan

In the new book "Write Your Own Business Plan," business expert Eric Butow takes the anxiety and confusion out of planning and offers an easy-to-follow roadmap to success.

Business News

Dads Who Do This Simple Activity With Their Kids for 10 Minutes a Day Are More Likely to Raise High Achievers

The straightforward approach can give children an advantage over their peers.


3 Things Anupam Mittal Looks At Before Investing In A Company

If you want to commit to entrepreneurship, you have to commit to a very long-term game, he says


Don't Be a Boring Brand – How to Create Brand Distinction That Has Everyone Turning Their Heads

In the minds of most consumers, you're selling commodities — unless you've created a brand distinction. This article will show you how to craft a brand that's not just known but unforgettable.

Starting a Business

Will Entrepreneurship Make You Rich? A Realistic Perspective.

If you become an entrepreneur just because you see it as a shortcut to "get rich," you may need to rethink your priorities. However, entrepreneurship does offer significant potential.

Starting a Business

How To Grow Your Startup With Rapid Experimentation

Lessons from a self-funded startup that grew through rapid experimentation.