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BANGALORE, INDIA: This year's Union Budget is being presented in the backdrop of the global economic slowdown that has really had an effect of tsunami among enterprises. Here is the wish list of some industry players:
Debasis Chatterji, CEO, Netxcell Limited
Mobile industry pays around 20-25 per cent direct and indirect taxes the load for which is ultimately passed on to the subscriber but if this tax is reduced, it would form a catalytic factor for the industry which currently is growing at the rate of 40-45 per cent.
If we want to achieve another 10 per cent growth the government should cut the taxes for the industry, which will help in increasing the subscriber base and eventually generating more revenues. We would also expect the government to distinguish profitable PSUs to generate additional cash, which will reduce the fiscal deficit.
The Indian telecom market has emerged as one of the fastest growing telecom markets in the world. The telecom industry has also fortunately not been adversely impacted by the global meltdown however to keep the momentum going strong for this sector, we do hope for the new budget to liberate the telecom industry in India from being subjected to multifarious taxes / levies.
Ramesh Lognathan, MD and VP (Products), Progress Software India
IT industry would expect the government to extend the STPI scheme for a few more years to help tide over the current crunch the industry is facing. The tax relief will help take some pressure off the companies that are already facing reduced business, severe pricing pressures and both driving profitability concerns. This becomes very critical specifically for SME organizations.
From a medium-term standpoint, I would like to see the budget also encouraging domestic software companies to target more of the domestic market. Not so much as a protectionist measure, but more as a measure to encourage more active participation. I would also expect government to encourage (and stimulate) IP creation. Pushing the industry beyond the present outsourced services focus to create packaged software and products would also help.
M Narsimha Rao, President, Hyderabad Software Export Association
As an Industry we are positive about the budget which will be presented in July. We are looking for policy interventions to help regain the momentum and bring back the high growth rates we have seen in the industry. We need the Government to enable higher investments into Infrastructure development, Primary & Higher education, in strengthening security and to encourage Innovation, R&D and Intellectual Property creation.
We need a healthy eco-system of SMEs in this sector and some specific policy interventions to help the smaller companies would immensely benefit the industry. In the current environment we are also looking for schemes which encourage higher job creation and we in the IT/ITES industry have tremendous job creation potential. Specifically for the short term, we need the Government to extend the Tax benefits under the STPI scheme for a further period of 10 years & allow greater freedom in movement of existing business into SEZs for IT/ITES companies.
V Laxmikanth, MD, Broadridge Financial Solutions India Pvt Ltd
From a macro level, I would look at the Union Budget focusing on allocation of appropriate resources and initiation of policy changes wherever required that should make it possible for India to get back to its GDP growth of 8 per cent to 9 per cent. Containing the fiscal deficit should be another important priority for the government at this stage.
This budget should also consider increasing spend on infrastructure – primarily power and transport. For export-oriented industries, while stimulus packages have been provided for, keeping in mind the global meltdown appropriate benefits need to extend to enable the Indian exports become profitable. This will, in turn, generate domestic employment opportunities which were lost due to the sharp decline in exports in last 1 year. For the IT / ITES industry the STPI tax exemption status should be continued for a few more years.
This budget will really be very crucial for the "aam aadmi" especially the middle class who have been impacted by the galloping consumer prices, relief should be provided to them by lowering excise duty on essential items of mass consumption. For senior citizens who have been impacted by the low interest rates in recent years, there should be either higher IT relief or increase in interest on savings instruments.
Suman Reddy Eadunuri, MD Pegasystems India
This year there is a huge anticipation for the Union Budget, as there is a lot of help that the economy is seeking from the new government after more than a year of struggle.
From the IT/ITES industry's perspective, there is a lot that the industry is expecting from the Budget 2009 such as:
More investments to improve he quality of Primary and higher education with greater use of ICT that perhaps brings some changes in how the money is spent and can help in creating industry ready talent on a long term perspective.
Extension of STPI benefits for a few more years and streamlining general tax anomalies should be thought through. In general, tax exemptions and relaxations will continue to keep India competitive with respect to the other emerging markets. Security strengthening is another area that clearly needs more investments and sophistication.
As far as the macro issues are concerned, some of the priority points in my opinion would include a strong consideration towards rural development initiatives like irrigation projects, housing schemes and providing Micro credit to spur entrepreneurship among the poor. I would also expect the Budget to allocate sufficient funds for improving the educational infrastructure in the interiors of the country and also uplift the existing system throughout the country.
Deepanshu Sharma, GM, Marketing Strategy & ISV Alliances AMD India
Government departments must focus on procuring real technology without brand biases as we all know the ill-impacts of monopolistic market practices. Monopolies hamper development of customer-centric solutions, and the monopolistic players retain unreasonable margins by dictating market prices, very often through unfair trade practices.
In such a scenario we would like the Finance Minister to drive free and fair competitive practices in government technology procurement. The solution in this case is as easy to implement, as it is to propose.
We hope that the government will increase their focus on PC penetration - the hallmark of any developed economy and help in augmenting the IT industry as new market locations open up.
Government needs to provide more incentives for local IT manufacturing (for desktops and laptops) and the Government should also look at faster deployment of technology for speeding up eGovernance reforms within central and state departments, and public sector units.
Tax exemption for educational institutions and universities is another primary area that would help drive faster technology adoption, thereby making the students industry-ready when they pass-out of schools and colleges.
