Budget 2023: Here are the key challenges in technology sector

"India is the best market right now in the world with the digital initiatives the government has implemented," says C Vijayakumar,  CEO & MD HCLTech.

Key challenges

Infrastructure: India’s infrastructure is still not fully developed in many regions.

This can be a major obstacle for firms.

Bureaucracy and regulations: The process of starting and running a business in India can be hampered by a complex web of bureaucracy and regulations.

This can make it difficult for entrepreneurs to get their ventures off the ground.

Digital divide: India is a country with a large digital divide. Rural and remote areas are lagging behind, both in terms of technology and awareness.

Industry ask

Digital taxes: Simplify regulations related to digital technologies and e-commerce to make it easier for organisations and SMBs to operate online.

The government can support digital innovation by reducing tax burdens, promoting e-invoicing and reducing compliance costs.

Tax incentives for R&D: Introduce tax breaks or credits for research and development to encourage innovation and investment in new technologies.

Changes to intellectual property laws: Stronger protection laws for software and other digital products to encourage innovation and protect industry investments.

Simplification of GST: Reduction in GST rate on specific services would encourage firms to increase investments in R&D and become more competitive.

This would increase exports as firms would be able to offer their services at lower prices, making it attractive for foreign organizations to outsource their software development needs to India.