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Budget Reactions From The Tech Industry
26 Feb, 2010, 5:07 pm IST | by
tech2 News Staff
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Here're some reactions from the Tech industry regarding the Union budget. W. S. Mukund, MD, Acer India "Its been a fairly balanced, yet progressive Budget. Focus on Education, Health and Infrastructure, with enhanced allocations, do pave the way for building a vibrant & competitive India. For the PC industry there are some positives in terms of scope for adoption of IT in initiatives such as the Financial Inclusion Fund project to extend Banking to more habitats and scaling up of the Smart card projects in Health Insurance. That a Tech Advisory Group is being set up under the leadership of Nandan Nilakeni is another pointer to rapid adoption of IT projects in the areas of Taxation, Pension, Treasury, Infrastructure and GST. For the PC industry, which had shown a de-growth in the year 2009-10, the roll back of Excise/CVD to 10% is a big dampener. Also some of the inconsistencies, that have been highlighted for redressal the last many months, such as MRP based abatement, phased reduction of CST to 1% (made all the more acute due to GST being postponed to the next fiscal) as also lack of any bold policy initiatives to make Broadband more pervasive and affordable, continue to persist. " Ramesh A Vaswani, Executive Vice Chairman, Intex Technogies (INDIA) LTD. The FM has done a commendable job of partially withdrawing the stimulus by balancing this with various schemes which should accelerate GDP growth. The focus on the rural economy with substantial & higher allocations will more than make up for the slack in demand, if any, due to the marginal increase in the excise duty rate. This budget will lead to an increase in the feel good factor which is believed to play an important role in increasing the demand of consumer products. It is very heartening to note that the cost of mobile phones will come down and will further boost demand and encourage local manufacturing. I am disappointed, however, by the lack of adequate attention to promote the local manufacturing of IT hardware and to increase domestic consumption of PC.I feel that the economy now requires for inclusive growth not only inputs in agriculture and rural infrastructure but also in IT literacy and IT infrastructure. India has been talked of as a knowledge economy. And a knowledge commission was also set up to chalk out various initiatives. The small increase of weighted average expenditure deduction on in-house R & D from 1.5 to 2 % only encourages ongoing R & D activities. The FM could have thought of additional incentives to lure large foreign corporations and research institutions to set up their facilities in India. Rajan Sharma (Sales & Marketing MB BU, GIGABYTE India) “Given that the industry is still in a recovery mode the tax incentive should have been extended. The rolling back of excise duties may affect sales. There has been no proposal to abolish Special Additional Duty (SAD) across products which is discouraging. We are glad that the roadmap for GST has been finally unveiled, which is very critical for creating a single-India market. We hope for better involvement and engagement of the Government with the industry as the finer details of the GST is worked out." Vikas Khanvelkar, M.D , DesignTech Systems Ltd Budget has nothing new for the IT Industry. 2 % increase in excise duty on all the products will not have a very significant adverse impact on the demand and hence the production. Rise in petrol and diesel prices will increase the inflation which is already very high. Substantial increase in the budget allocations for “Infrastructure and Energy” segments is a really good move which will create positive impact on the GDP and Economy in the long run by addressing long pending pain areas of the industry. GST has been postponed to 1st April 2011 as anticipated. Industry will have to keep dealing with multiple level taxation structure for one more year. Surjeet Singh, Chief Financial Officer, Patni “Increase in MAT from 15% to 18% on book profits would result in higher outgo of cash in the short term and would affect Indian corporates adversely. However this impact has been cushioned to a large extent by lowering of corporate surcharge from 10.0% to 7.5%. We welcome a higher percentage of weighted deduction on in-house R&D which has been increased to 200% from 150% as it will incentivize IT companies’ innovation focus. We appreciate the setting up of “Technology Advisory Group for Unique Projects” along with substantial outlay for UID project. This group will help in accelerated execution of large strategic Government IT projects thereby benefiting IT companies. Budget also proposes to ease the process of refund of service tax credit for exporters of services which will hopefully streamline the current cumbersome process. Tax reduction on account of changed tax slabs for individuals will also benefit the industry indirectly. However Budget has not addressed IT Industry’s demand for extension of Tax holiday under STPI scheme as per Section 10 (A) of Income Tax Act which is a significant negative for the Industry. Nitish Mittersain, CEO, Nazara Technologies This should help the distribution of games from global gaming companies such as EA into the Indian markets. This would lead to increased number of global offerings and a pick-up in demand. Nazara Technologies develop a range of branded and original mobile content that is highly relevant to the culturally diverse consumer base in the country. It combines technology with a compelling experience to create innovate applications in the mobile environment. It provides complete solutions for the development, deployment, targeting and tracking of promotional campaigns on emerging mobile platforms. The company's wireless solutions integrate content of media companies, marketing messages and the consumer reach of wireless carriers. The long list of its partners in India includes names such as, Spice, Idea, Vodafone, BPL, Tata Indicom, Reliance India Mobile and Cellebrum. |
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