The Hindu Business Line : Connectivity thrust

The Budget proposal allocation to the information technology department has been increased to Rs 1,680 crore. The proposal is to create more state-wide area networks (SWAN), 1,00,000 broadband-enabled common service centres in rural areas and creation of state data centres. Rs 450 crore for SWAN and Rs 275 crore for state data centres means a host of opportunities is up for grabs and is positive for companies with existing deals in SWAN projects, such as Tulip IT, 3i Info tech, CMC and HCL Infosystems. It may create a longer and sustainable revenue visibility.

Modern education

Under the model school programme, the government has proposed to open 6,000 high-quality schools with the latest infrastructure. The spend here is budgeted to be Rs 650 crore. Educomp Solutions, Everonn Systems and NIIT, all of whom have existing relationships with a large number of schools across the country for providing learning solutions, will look to tap this fresh opportunity.

Smart PDS

Budget 2008 has envisioned a smart card-based methodology for the public distribution system deliverables such as food grains. Smart cards for PDS consumers is to be pilot tested by the Haryana and Chandigarh Governments. If the project works well, Bartronics, a key player in the domestic smart card business, may benefit.

Nothing concrete

The Cement sector didn’t see its expected relief of abatement in MRP for excise duty or a cut in the import duty on its inputs. Rather, the Budget has announced a 14 per cent ad valorem duty on bulk cement, which is expected to raise the duty outgo of players such as ACC, Grasim industries and Ultra Tech cement, where bulk cement is a major component in the product line. With huge capacity additions coming on stream and countervailing duty also not re-imposed on ceme nt import as appealed, the large builders might as well look at importing cement for their needs.

Boost for seniors

The inclusion of Post Office Senior Citizens Scheme 2004 and Post Office Time Deposits under the basket of deductions available under section 80C of the Income Tax Act is likely to provide a big fillip to the tax saving options of senior citizens. While a number of investment options including life insurance premium, tax saving insurance and mutual fund products and repayment of home loan qualify under Section 80C, very few options were viable for a senior citizen looking to invest for tax-saving purposes but wanting a regular income stream from the same.

As a result the Rs 1,00,000 option may not have been fully exhausted by such persons. Inclusion of the above-mentioned post office schemes now provide senior citizens with the dual benefit of tax deduction as well as investing in a fixed income providing scheme.

Moreover, the threshold limit for taxation of income has been increased to Rs 2.25 lakh for senior citizens from Rs 1.95 lakh last year.

Positive picture

The reduction of customs duty on specified parts of set-top boxes from 7.5 per cent to nil is positive for Dish TV, WWIL and players entering the IPTV space such as MTNL, Reliance Communication and Bharti Airtel.

This should help reduce the prices for the end consumer as well and increase the pace of digitalisation in media. The excise duty on Wireless Data Card has been slashed from 16 per cent to nil. This will reduce costs for end users. Beneficiaries inclu de Reliance Communication and Tata Teleservices.

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