Advertisment

Will Finance Minister strike the right balance?

author-image
CIOL Bureau
Updated On
New Update

BANGALORE, INDIA: The forthcoming budget is very critical as one could expect a political agenda getting dominated resulting in a popular manifesto targeted to attract the Indian public.

Advertisment

But the key is to wait and watch how the Finance Minister will strike a balance between the political objectives and stimulating the economic health of the country.

The Indian economy is now clearly in a consolidation phase after 3 years of sustained growth witnessed with the GDP rising from 7.5 per cent in FY05 to 9.6 per cent in FY07.

A slowdown could well be on cards and it has been estimated that this year’s GDP may perhaps grow at a slower pace of 8.7 per cent instead of 9.6 per cent recorded last year.

Advertisment

While, there is no doubt that 2007-08 has been a landmark year for tax collections, a repeat performance in 2008-09 appears challenging, given the deceleration in corporate profits which was a significant driver of tax buoyancy in 2007-08.

Our Expectation from this year Budget

Implementation of common GST

Advertisment

Reduce surcharge on direct taxes

Extend STPI benefits for the small and mid size IT/ITES companies, for another five years

Abolish fringe benefits tax on travel and accommodation provided to the employees moving onsite as it’s an extra cost to the industry without any justification. As onsite services is an integral part of IT operations and by no means has any ‘fringe benefit’ in it.

Advertisment

Increase plan allocation for Infrastructure and social sectors like education and health

Reduce revenue deficit.

Last few years has seen consistent growth in the Indian IT sector which has a very promising future ahead, and we expect that the above-mentioned reforms would help in accelerating and sustaining the growth path in the industry on the whole.

The IT sector had been earmarked as one of the special sectors that would help India to become a global giant over the last decade. The promise has held good and a few more years in the same fashion would ensure that India becomes the hub for growth in south East Asia.

(The author is Chairman & CEO of Zylog Systems limited)

tech-news