The Hindu Business Line : Compounded disappointment

It is disappointing that 10A and 10B benefits were not extended, despite the IT sector’s performance and current and potential employment-generation capacity. The disappointment is compounded in light of the steep rupee appreciation and economic downturns in our major markets.

Extension would have also benefited BPOs, which face steep competition from other countries in addition to currency-related problems. Also, placing a service tax on customised software development will have an adverse impact for the sector.

Enhance employability

On the positive side, proposed education allocations will provide short-and long-term benefits. Notable among these is the announcement of the Skill Development Mission which will support our expanding knowledge-based economy and enhance the employability of the workforce. We also welcome the initiatives to take the benefits of IT to a broader cross section of society.

Balanced act

The Finance Minister has pulled off a fairly balanced act by not entirely giving into the indulgence of a populist budget before an election year. The debt waiver of 60,000 crore, in terms of its funding and execution, might merit further examination to determine if it adds to inflationary concerns. The Finance Minister’s success in maintaining fiscal discipline is commendable.

On the other hand, an expected downward revision of the corporate tax rate, given recent robust tax collections, did not find favour with the Finance Minister. However, employees will welcome the proposed changes to personal income tax structure which has also the potential to accelerate consumption growth.

(The author is CFO, Satyam Computer Services Limited)

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