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Mixed reactions from storage, networking communities

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CIOL Bureau
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BANGALORE, INDIA: Here is what the networking and storage industries had to say after the Union Budget 2012.

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Cisco India

'Union Budget 2012: A heartening one'

"The government’s focus this year on enabling “faster, sustainable and more inclusive growth,” through the twelfth five year plan is welcome," said Naresh Wadhwa, president and country manager, Cisco India & SAARC.

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Scaling up of the Aadhar project as well as enabling it to support PDS will greatly benefit the common man. Leveraging technology to transfer subsidies directly to beneficiaries is definitely a positive step.

The budget lays considerable focus on infrastructure and rural development. The increased infrastructure spending at Rs 50 lakh crore, Rs 10,000 crore allocated to NABARD for refinancing regional rural banks and the plan to set up ultra small branches under the ‘Swabhiman’ campaign is encouraging.

Quality healthcare is a crying need so it’s good to see the NHRM provision being increased from 18,115 crore to 20,822 crore. Measures to boost both basic education as well as skill development initiatives through an allocation of Rs 1,000 crore for National Skill Development Corporation is laudable too.

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On the industry front, setting up Rs 5,000 crore venture fund for MSME sector is a welcome move, given that SMEs employ a sizeable population. We are also hoping that the GST roll out is on track for August this year.

Overall, it is heartening to see that the budget addresses some key areas like education, healthcare and infrastructure which are critical to national growth and development.

Juniper India

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'The R&D expenditure cut is welcome'

“With the proposal to extend the weighted deduction of 200 per cent for R&D expenditure in an in-house facility for five more years, the Union Budget FY 2012-13 is a positive promotion of the long-term importance of science, technology, research and innovation in India," said Sridhar Sarathy, vice president, India operations, Juniper Networks.

This will be of benefit to organizations conducting research and development in India and will help to encourage them to deepen their connections with the ecosystem and the talent available in the country. The Finance Minister’s recognition that “the driving force of a modern nation is research and the creation of new knowledge” is to be applauded.

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Emerson Network Power

Not a definitive growth budget

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With Excise duty increase the required Stimulus for growth has been curtailed and would be inflationary. This puts pressure on the already slow manufacturing sector.

"Initiatives to bring down Subsidies from current 2.5 per cent of GDP to two per cent in 2012-13 and 1.75 per cent in 2013-14 is welcoming," said Sandeep Nair, the President and MD of Emerson Network Power.

GST & DTC reforms still not aggressively pursued as expected by the Industry and People. Another welcome aspect is the 12th Plan period promises 50 Lakh crore investment in infrastructure with 50 per cent private participation-implementation would still remain a major challenge. Overall not a very clear and definitive growth budget.

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IAMAI

'Budget underlines the imp of ICT in governance'

The Internet and Mobile Association of India (IAMAI) has lauded the Union Budget for bringing IT and Internet based solutions to the larger developmental issues facing the country.

This year’s budget has clearly brought to the forefront the power of ICT in enabling livelihood, good governance, transparency and proper targeting of entitlements. According to the association, so far ICT was the domain of a few specialists in the government; the Union Budget has brought it to centre stage by recognizing its larger role in achieving developmental goals. 

A good pointer to this case is the fact that Aadhar now supports payments for MNREGA, widow pensions and other schemes. The announcement that it will now be mandatory for companies to issue IPOs above Rs 10 crore electronically and 10 per cent of IPO to be subscribed electronically, is a positive step, and highlights the role of IT in ushering transparency.

The other key areas where the role of IT has been highlighted are the announcement of Kisan credit cards that can be used as ATM cards, and Computerization of PDS system integrating Aadhar. IAMAI believes these are forwarding looking steps, which will stop leakages and will greatly benefit the common man, and also improve the overall governance and transparency.

According to the association, the announcement of the finance minister to use a mobile based MIS to track fertilizer movement and thereby fertilizer subsidy from the factory to the retailer is the best case example of using the power of ICT to reach subsidiaries to the ultimate beneficiaries. It may be noted that a similar solution by a member of the association was given the best e-governance award at the India Digital Summit in January 2011.

However, IAMAI lamented that for the nascent MVAS and internet industry, there was no exemption from service tax. Service tax has unfortunately been brought back to the original 12 per cent which is going to have a negative impact on the digital content and services industry.

It may be noted that the government has allocated Rs. 20,000 crore for National Optic Fibre Plan which would connect all the panchayats of the country. Given this push for infrastructure, it was natural that the content and services industry riding on this infrastructure should have been given concomitant benefits.

Fujitsu India

'In-principle' acceptance to Unified GST

"The Hon’ble Finance Minister has demonstrated the “in-principle” acceptance for moving towards Unified GST by standardizing the tax Rates across the spectrum of Services, said Ashutosh Prabhudesai, Controller & Director Finance, Fujitsu Consulting India.

 The rationalization of tax slabs for non corporate income taxes is also a step towards the implementation of Direct Taxes Code. However the excise duty increases and Service tax rate increase would mean higher costs for the Industry. The pill could have been sweetened by a reduction in corporate tax rates which did not happen.

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Stellar Data Recovery

'Budget; a big let down'

"There is nothing to cheer for small & medium sized companies. Neither there is any consideration on Tax Exemption on software exports nor their is any change in the Corporate Income tax," said Sunil Chandna, CEO, Stellar Data Recovery.

Increased excise duty and service tax would inflate the infrastructure and operational costs. Instead of bringing in a stimulus, it would make lndian IT companies less competitive Globally.  To sum up The budget was BIG let down.!"

NetApp India

'IT industry to benefit with thrust displayed on skill development'

Proposed bill on government procurements is a positive move both for industry in general as well as the IT hardware industry.

‘While the fact that corporate tax not being tinkered with is probably the only source of joy for private industry in general, the Finance Minister has been consistent with his social inclusion agenda with the rise in allocations for several key schemes including rural sanitation, water and education," said Anil Valluri, president — NetApp India Marketing & Services Private Limited.

Skill development is the other area where that has seen some focus with a commendable credit guarantee scheme rolling out in addition to enhanced allocation for the National Skill Development Council. This will solve a lot of problems being faced by industry in general and the IT industry specifically.

The move towards improving governance with a new bill addressing procurement concerns in the government is a good sign. I do believe increased technology investments in government systems will be an imperative in this area.

The burden on the average tax payer however is set to go up with this budget, with concerns around price rise aggravate coupled with proposed increase in excise duty and service tax with no significant tax exemptions announced. Overall a conservative and cautious budget focusing on fiscal consolidation.

CSS Corp

'There could have more relief on income and service tax'

“This budget sought to lay the foundation for the twelfth five year plan. This year there has been a fair balance on the moving variables front," said Rameshkumar V, chief financial officer Global, CSS Corp.

While there have been significant initiatives taken for infrastructure and agriculture, there could have been more relief on the Income Tax & Service tax to balance the budget plan. There is a marginal increase in NHRM provision for healthcare which is a prerequisite in a county like ours and the focus on education is commendable. In terms of subsidies (fuel and basic amenities), it is being played to the gallery.

Though there is a thrust on infrastructure, agriculture, education and healthcare, there is less cheer to the IT industry and to the common man. We are hoping that this budget lays a foundation for the nation to become the India we envision in 2020.

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