We shall soon see the unveiling of the Union Budget for the financial year 2017-18. Expectations are running high and the government is tasked with easing common citizens as well has corporates that have borne the brunt of demonetisation.
The irony of the situation is that demonetisation has actually helped certain sectors—not just fintech and related services but also companies that are driving the knowledge solutions industry.
The knowledge solutions industry is 100% cashless and a potential foreign exchange earner.
There have been a lot of initiatives undertaken by the current government for budding entrepreneurs and startups in the services sector. Talking specifically about the corporate solutions industry, which provides consultative learning solutions with corporate training, the road ahead looks positive, if the government supports it with desired policies and propositions.
The knowledge solutions industry is 100% cashless and a potential foreign exchange earner; it can be truly global in approach, for the need and market, both are global. Numbers indicate a global CAGR of 7.5% and US$350 billion market size. India currently is only 8% of the global market and needs to be explored to its full potential.
Notably, India is a service-driven economy and today 60% of the GDP is driven by this sector, while if we look at UK, this ratio is 80% (though we have recently overtaken UK in terms of GDP). The government created enough impetus for the manufacturing sector with initiatives like Make in India. We request a similar focus and push as the scalability of the service sector is fast and its impact is global.
Also, the government must enable ways and means, with specifically designed policy/policies and taxation support for the entry of private equity players into Indian markets for MSMEs. This will help small and medium players to increase their reach, and gain more revenue for the country.
The need of the hour is a friendly repatriation mechanism to be made available for investors and a possible "tax holiday", say for three to five years, on such cash outs or repatriations. Easy FDI investment norms and licensing will support entrepreneurs and make them feel protected as they work to reach the peak of the growth curve. All this will help in boosting the service sector, with cashless and technology-driven businesses.
As for GST, the much-awaited indirect tax reform, we are hoping that the government will extend the date of provisional registration, as organisations are still experiencing some teething issues in getting registered on the GST portal, though it's a game-changer that will help in reducing the cost of services in any sector.