Budget: Indirect impetus to IT industry

By : |February 29, 2008 0

"Budget address supply side issues"
Ravi Pandit, chairman and Group CEO of KPIT Cummins

The budget provides some indirect impetus to information technology industry. The emphasis on education in general and science and technology in particular is helpful, because over the long run, it will address the supply side issues.

There is also an emphasis on usage of IT in governmental operations. This is also likely to enhance the acceptance of IT in the country.

As regards direct benefits to the IT sector, the provision relating to service tax indirectly helps – because it offers an avenue for setoffs for the service tax paid by the IT companies.

On the other hand, there is no extension on the STPI scheme nor is there any re-look at the Fringe Benefit Tax, especially on employee stock option plans.

"No cut on corporate tax a disappointment"
Alok Vaish, CFO, Yatra.com

"Overall it was a good budget. Even though the debt waiver for farmers awards the defaulters, it is welcome as it will help the ailing agriculture sector immensely.

As a result of buoyancy in tax receipts, the FM has raised and rationalized the tax slabs giving relief to all the tax payers, which should create a feel-good factor.

However, no cut in the corporate income tax rates or the surcharges is a disappointment.

The tax holiday being granted to 2,3, and 4 star hotels established in the UNESCO-special "World Heritage Sites" and allocation of Rs.624 crore for Commonwealth Games will help give tourism industry a boost."

"8.8 per cent GDP achievable"
Sadeesh Raghavan – managing director – India Domestic Business, Accenture

“This budget has seen a series of positive messages across sectors with the CENVAT reduced on all goods and excise duty cut on various items.

The pharma industry will have a positive impact as it has seen a reduction on customs duty on few bulk drugs and a cut in project imports.

Infrastructure industry is also set to benefit as there is an allocation of Rs 12,966 cr towards the National Highway Plan this year.

Having said that the FM is confident of maintaining 8.8 per cent GDP growth for 08-09, I believe this is an achievable target.”

Approach to bridge digital divide still missing Ramesh A. Vaswani, executive vice chairman, Intex Technologies

Waiver of farmer loans to the extent of 60,000 cr satisfies a pressing demand but, continuing to exempt agricultural income from tax places the entire burden on the small tax payer base.

In IT hardware, it is disappointing that exemption from customs duty has been restricted to very few items. Though  additional funds have been allocated for broadband Common Service Centres, Data Centres and SWAN’s to take benefits of Internet to the rural areas, a coordinated approach to bridge the digital divide is still missing.

A special programme to take Internet to every panchayat and school and make the basic PC more affordable is the need of the hour.

"No affect to hardware industry"
Indrajit Sabharwal, MD, Simmtronics Semiconductors Ltd

"The Budget has not made any difference to the IT hardware industry. Channel partners were apprehensive that the excise duty would drop to 8 per cent. The FM has taken a good decision to drop from 16  per cent to 14 per cent only. This is really not going to impact the hardware computer industry."

"Uniform CST welcomed"
Amar Babu, managing director, Lenovo India

“It is a known fact that our industry has been impacted due to the low abatement rate fixed by the government for MRP-based excise duty. We need to see the finer details on this.

Uniform CST is welcome and makes the supply chain simpler to operate. The budget has not addressed the special additional duty (SAD) being levied today which is hurting manufacturing units.

We are studying the impact of the reduction in excise duty from 16 per cent to 14 per cent for our industry.”

"Duty reduction on converged products a timely step "
Alok Ohrie, managing director, AMD India

“I would like to congratulate the FM for coming out with a budget that strengthens our overall economy and especially its two foundation pillars – agriculture and education.

Higher education has received its rightful importance in this year’s budget. The decision to set up three more IITs, national knowledge centers, two more Indian Institutes of Science Education and Research and scholarships for science education are extremely relevant measures to grow the talent pool.

These initiatives will play a critical role in preparing and encouraging graduates who will take the high technology sectors to the next level of excellence.

The exemption of specified raw materials for use in the IT and electronic hardware industry from customs duty is a positive sign.

Technology advancements will fuel converged devices for the well-informed on-the-move consumer. The reduction in the duty on converged products is a timely step to keep the country on par with global technology developments.”

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