Broad-based and inclusive growth

The IT industry has generally welcomed the union budget for 2010-11. S. Mahalingam, Chief Financial Officer, Tata Consultancy Services, welcomed the “thrust” towards “broad-based and inclusive growth.” “The enhanced focus on SEZs to drive growth and employment and clarity on the tax regime would aid the recovery of the IT industry,” he added.

S. Gopalakrishnan, CEO & MD, Infosys Technologies, welcomed the move towards fiscal consolidation. In his view the highlights of the budget were the reduction in the fiscal deficit, the increased investment in infrastructure, the revision in the personal income tax slabs and the enhanced focus on e-governance.

However, Mr. Gopalakrishnan said the increased excise duty on petroleum products and crude oil might fuel inflation. He also said the budget had “no focus on higher education.”

Although Som Mittal, President, NASSCOM, said the budget, in overall terms, was positive, the increase in the Minimum Alternate Tax was “a disappointment.” This would be particularly a “burden” on small and medium companies, he said.

Mr. Mittal also deplored that there was no move in the budget to bring about parity between incentives in the STPI scheme and SEZ scheme.

Mr.Suresh Senapaty, Executive Director and CFO, Wipro, said the Finance Minister was “betting on the buoyancy of the Indian economy.” He said the IT industry welcomed the the “resolve of the Government to leverage technology for e-Governance, GST implementation and the tax administration.” “Clarifications on Section 10AA and continued encouragement for SEZ will go a long way in promoting exports,” he added.

Lakshmi Narayanan, Vice Chairman, Cognizant Technologies, termed the budget “balanced.”

He said the proposals were aimed at “using information technology as a key lever” by allocating more funds for the Unique Identification project. “The amendment rectifying the anomaly in Section 10AA with retrospective effect from April 1, 2006, fulfills a long-standing industry demand,’ he remarked.

Sandeep Menon. Country Head, Novell India, said the budget reflects the governments confidence in the Indian economy. “I am particularly please to note that there has been no knee jerk reaction to withdrawing the fiscal stimulus, as I don’t think the time is right yet,” he said. He said he would have preferred a move towards rationalization of levies and taxes on packaged software. Perhaps it will be addressed as the GST is rolled out,” added.