'Enable companies to tide over crisis'

I am keen to see what the government is planning to do to help Indian companies fight the ill effects of an imminent US recession.

With stagnation possibilities and downward movement of US interest rates, I expect some backlash on outsourcing and stiffening of the rupee vis-à-vis the USD.

The government should enable Indian companies to remain competitive by helping them reduce their own costs in such a scenario.

Reducing tax rates, making USD borrowing easier, reducing service tax (to help Indian companies use more outsourced services) and providing incentives for export would help Indian companies compete effectively over the short to medium term.

My wish list for Budget 2008:

Service Tax: Service tax base rate should be maintained at 12 per cent, as the burden is already heavy on the end consumer and outsourced service providers don’t find themselves competitive.

Service Tax on commercial rentals: At present service tax is charged at 12 per cent on commercial rentals which is hurting a lot of small companies which are already forced to pay inflated commercial rentals in most parts of India. I think the commercial property rentals should be exempted from service tax.

Fringe Benefit tax on Travelling & Training should be removed: Business class travel and five-star hotel accommodation can be called fringe benefits but economy class travel and budget hotels are a pain for employees, not perks or fringe benefits.

STPIs: The government has not given any clarity about future of STPI, I think the scheme should continue for an equal term with SEZ scheme.

(The author is the CEO, Fractal Analytics)