Mixed Reaction from IT Industry towards the Budget (08-09)
This Budget (08-09) has been seen as a neutral one on the IT sector. Enhanced
excise duties on packaged and customized software as well as continuing
uncertainty on the extension of tax holidays for software technology parks beyond the deadline is now just a year away: Together ensured that the IT sector’s reaction to last week’s budget has been largely muted. The industry
is unhappy over the silence on the extension of the Software Technology
Parks exemption scheme as well as on measures to counter the rupee .
POSITIVE ASPECTS:
16% Excise Slash:The proposal to increase allocation to the IT Ministry as
well as on education has been welcomed as promoting e-governance efforts and improving skill sets of the youths. The slashing of 16% to zilch of the excise duty on data cards is surely a bonanza for the IT industry.
Corporate Customers Benefited: Corporate customers who want their mobile
executives to be available via internet can use these data cards in large extend.
These data cards are supplied by mobile service providers which includes Airtel,
TataIndicom, Reliance and Vodafone. These data-cards use the cellular telephone
network to access the Internet, when connected to the PCMCIA slot of the laptop.
Instant web access : Meanwhile the users can find much easier to get
instant web access, when the data card with USB (Universal Serial Bus) connector
is plugged into any desktop PC. Since 2007, all Indian wireless data card providers
have offered the option of a card with USB type connector.
Allocation of resources: The continued allocation of resources is a very positive
sign. The challenge that we face today is not of unemployment, but rather of unemployability. So continued allocation of resources would eradicate the problem
of getting a skilled employee .
FEW SETBACKS FOR IT:
STP Benefits: The BPO sector is unhappy, since STP benefits have not been
extended to it beyond March 2009.This will impact BPO that have been set up in
last 2 to 3 years who are planning to set up BPO and have to wait for SEZ to come up.
STPI Scheme: The budget has not commented on the extension of the STPI Scheme.
This will make small and medium enterprises to look for alternatives to manage the onslaught of taxes if the scheme is not reconsidered from next year.
Overall Scenario of IT:
This budget has been a mixed bag for the IT industry.The thrust on education and increased allocation for additional higher centers of learning is encouraging since it benefits all knowledge intensive industries. But it will be disappointment for BPO and small enterprises for not extending the STP benefits and STPI schemes respectively. So,
there is a neutral picture coming into mind for IT as for as this budget is concerned.
