NEW DELHI, INDIA: This year's Union Budget is a bit delayed as it is likely to be scheduled in the third week of March. But that hasn't stopped IT industry's soaring expectations. So, finance minister Pranab Mukherjee needs to be well prepared.

As the industry and government are yet to adopt a firm agenda to address pain points such as fiscal and revenue deficits and declining growth rate, the industry yearns for economic stability, besides radical reforms in taxation space.

Communications and IT minister Kapil Sibal was encouraging when he said that the government would create such an environment that could attract investors in the country.

MAIT president Dr Alok Bharadwaj reiterates the intent of GST implementation and believes that they are optimistic about attracting more FDI. “The IT industry expects some policies to help increase manufacturing of IT products,” he said.

Bharadwaj also said that the expansion of IT adoption is critical for industry. Hence, broadband and IT penetration must be dealt on priority, he added. With government’s mandate of online delivery of services, Bharadwaj feels it would enhance GDP.

Sify Technologies CFO MP Vijaykumar feels that with several controversies surrounding the Union Government, the Budget is likely to be fairly populist and act as a balm. “Unfortunately, that is a solution that the country can ill afford at this stage,” he said.

While fiscal deficit has to be necessarily lower, significant government investment towards education, healthcare and infrastructure would trigger all round growth, Vijaykumar added. Sify believes the structural reforms in taxation regime and Company Law reforms should be allowed.

Rajdeep Endow, managing director, India & Global Delivery Lead of SapientNitro, said that they are expecting the finance minister to intervene in some critical aspects of direct taxes, which he believes include reduction in corporate tax rate, MAT stability, Exemption to SEZ units from MAT provisions, availability of MAT credit on amalgamation, re-opening of
assessments.

“Extension of advance ruling scheme for resident companies should be mandated as this will help resident companies to sidestep ambiguity and circumvent hardship of paying taxes in case of different interpretation of law by them,” he said.

From an indirect tax perspective, Endow feels that implementation of GST will be a historic reform. “A clear and rational timeline for its implementation is hoped in this Budget,” he added. With GST roll out missing its deadline, the company feels that CST rate should be reduced to 1 per cent.

Executive Vice Chairman of Intex Technologies Ramesh A. Vaswani feels that Union Budget 2012 could be a watershed in economic policy initiatives targeting digital inclusion. The budget, he believes, deserves special attention for overall GDP.

Vaswani said that the provision of affordable devices in coordination with broadband, at the panchayat level will be the key challenge. In order to accelerate IT and broadband penetration in rural regions, he said that government together with banks should introduce specially-built schemes.

S Sridharan, managing director of TAKE Solutions said that 2012 budget should address the industry painpoints. "The new budget should maintain the fiscal balance, provide incentive for growth and clear all uncertainty in the tax regime," he said.

P Venkatesh, director and co-founder of Maveric Systems believes that the IT industry is experiencing all-time low growth, therefore, he suggests that government should provide all possible support. "IT product development should be given special concessions," he said.

"The surcharge and education cess that were introduced as interim measure, needs to be removed," he added.

As there is apparent confusion regarding packaged software, Maveric Systems, feels that it's better if government should clarify the situation and accord on priority basis by lowering the tax rate on it.