Tuesday 1 March 2016

Budget to boost Digital India vision : Reforms in Postal Department

Press Information Bureau 
Government of India
Ministry of Communications & Information Technology

01-March-2016 18:01 IST

Budget to boost Digital India vision

The Union Budget 2016-17 has given a big boost to the Digital India vision of the Hon’ble Prime Minister. The announcements made by Finance Minister, which are expected to give a big boost to Digital India initiatives, Digital literacy, greater application of Cloud and above all big push   to the Electronics Manufacturing are appreciable steps. The Finance Minister has also focused upon   the larger involvement of post office platform for financial inclusion, including delivery of services. 

Before coming to the  specifics of announcements   in  Budget, it would be relevant to note  very  briefly some  of the  key  areas   of  profound    change, which has  happened  in  the  last  20  months. 

1.  IT / ITeS exports has   crossed USD 100 billion. 

2.  India’s share   in global IT services outsourcing presently is 56 %, which is growing every year. 

3.  The  total  employment  in IT /  ITeS  sector is 37  lacs  in this  financial year,   out  of which the  net  addition is 2 lacs. 

4.  Electronics Manufacturing has   seen remarkable improvement, due to the initiatives of this government. When this government came to power, in June    2014, the proposals worth of only 11,800 crores were received. Now, it has risen   to 1,20,294 crores. 

5.  Due  to the  initiatives  taken up  in the  last  Budget, especially the duty   rationalization,   we have  noticed remarkable  acceleration  in the  field  of Electronics  manufacturing.   In this connection, mobile manufacturing            presents very encouraging area.    In 2014-15, the mobile units   manufactured   in the country were 5.4 crores, which have more than   doubled to 11 crores in 2015-16.  After the duty rationalization   in the last Budget, 16 new mobile manufacturing units   have been   set up in this financial year. 


Electronics Manufacturing: 

Efforts made   in the  previous Budgets  of this  government  for promoting electronic manufacturing   in India  has  also  got  encouraging  boost   during  this budget  by  further   rationalization   of  duty   structure.   As  a  result    of  this   the domestic  manufacturers     of  Routers,   Broadband   Modems,  Set-Top  Boxes, Digital Video Recorders,  Network Video Recorders,  CCTV Camera,  Lithium- Ion  Battery  would  enjoy   duty   advantage  of  8.5%   vis-a-vis  imported  goods. Domestic  value    addition  In mobile  phone  phones,  battery,  wired headsets/speakers     would enjoy  a duty  advantage  of 10.5% vis-a-vis imported goods.  This   will   also   encourage   domestic   manufacturing    of components. Domestic manufacturing   of routers   and    broadband            modems   will   further encourage manufacturing      of telecom equipments.  

In the   IT/ITeS (IT Enabled Services) sector, sunset   date   for Section 10AAof the Income Tax Act allowing tax benefits for IT units   in SEZs has been extended from 2017   till 2020.   This will enable technology units   to set up and commence operations in SEZs. 

A very   significant incentive  IS   the   extension   of  Section  80  JJAA   to Income Tax  Act  for  skill  development  to  services companies  as  well.  This will permit 30 % of additional wages paid to new workmen, deductible for 3 years. This  will  give  a  big  boost   to  the   BPO  operations,   which  this   government  is pushing-in  a big way.  

Encouragement       to Digital   Literacy    & Digital   Lockers: 

We are   happy   to   note    that    the   Finance   Minister has    provided for creation of Digital depository of school leaving certificates, college degrees and mark-sheets. This   would enhance   the   footprint of cloud   technology in the Country.  The  IT department   has   already  laid  down the  framework  for  cloud technology and  will assist  in  the  expansion. 

The Budget has given extraordinary   expansion  to Digital Literacy in  the   country,   consisting  of  imparting  digital  literacy  to  6  crore households  in  next   3 years. The IT department was keenly pushing for this expansion.  As of now, against the target of 52.5 lacs, more than   40 lacs have been trained. 

Use of Aadhar   platform    for delivery    of services

The Finance Minister himself, as  announced In the   budget,  will  be  moving a  legislation  to  give  a  statutory   backing  to Aadhar,   for   delivery  of   services   /    subsidies   /   benefits,   corning  out    of Consolidated  Fund    of  India.  This   will prevent leakages by identifying the beneficiaries correctly and would encourage good governance. 

The Minister is assured  to note  that  in the  budget speech, Finance Minister has  laid  great  stress  on the  use  of digital platform across various departments. This   will further encourage consolidation of seminal programmed of Digital India 


FDI   equity inflow in telecom Sector has touched a new high during FY 2014-15,  which  is  $2895  million which  is  80%  more   than    the   FDI  equity  inflow received during  2012-13  ($304 million) and    FY 2013-14  ($ 1307  million) put together. 

- STATUS OF NOFN (BharatNet) as on 29.02.2016

- End June 2014-

·         OFC pipe laid is 2292   kms
·         Optical fibre laid is 358 kms

-As on 29.02.16 -

·         OFC pipe laid is 1,24,797 kms (51,616 GPs)
·         Optical fibre laid is 96,597 kms (41,086 GPs) 

Reforms in Postal department: 

Efforts to  leverage the  vast  network of India Post  for implementing the  mandate  of financial  inclusion  has   received a  renewed momentum  from the   Budget  announcements.    In May 2014, India Post   had   only   230   Core Banking Branches   offering anywhere Banking Services and   only   4 ATMs. Today, it is a  matter  of great   fulfillment that   India Post  has   not  only  installed more than   576  ATMs but   has   overtaken  the  State   Bank  of India to  become India's  largest  Core   Banking  Network having  18,231  branches.   By March, 2016 all the 25,000 Departmental Post Offices would offer Anywhere Banking facilities using Core Banking Solutions.  1000 ATMs shall   also be installed by 31st   March 2016.  This   would imply that   all Post   Office Savings accounts/certificates   in all 155,000 Post Offices of lndia will come under Core Banking Solutions. As on  29th February, 2016  India Post  has  issued  1,26,181 ATM/Debit Cards to its   account holders.  It is also   expected that    by 31st March, 2016    20,000   Micro ATMs shall    be   installed   across the   country. Further,   India Post   has   achieved new   heights in tapping the   potential of ecommerce. Its parcel revenues have witnessed a growth of 110% and it has collected more than   Rs.1200 Crores from Cash   on Delivery mode of payment for e-Commerce services.

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