The Hindu Business Line : Industry unhappy over silence on STPI scheme

March 2 The Budget has been seen as neutral on the information technology sector. The industry is unhappy over the silence on the extension of the Software Technology Parks exemption scheme as well as on measures to counter the rupee rise. The proposal to increase allocation to the IT Ministry as well as on education has been uniformly welcomed as promoting e-governance efforts and improving skill sets of the youths.

Mr Hiranya Ashar, CFO, Rolta India: It is a big positive for Rolta to see substantial increase in defence budget by 10% to nearly Rs 105,000 crore. This gives both us and our joint venture with Thales a huge market in India and opportunity to grow faster.

Mr V. Sundarajan, CFO, Aztecsoft : The increased allocation to the Ministry of Information Technology would help IT companies expand their presence in the domestic market. It would also lead to greater utilisation of IT in rural areas.

N.R. Panicker, Chairman and Chief Executive Officer, Accel Frontline: The rise in excise duty on packaged software from 8 per cent to 12 per cent is only a move to rationalise tax and will not have any impact on revenues. That software development will now be charged service tax is more of a clarification.

Mr R. Desikan, Group CFO & Finance Director, Mastek: For IT, this Budget has been a mixed bag. The thrust on education and increased allocation for additional higher centres of learning is encouraging, as it will benefit all knowledge-intensive industries including IT. In the context of rupee appreciation, we were expecting relief from service tax to firms operating in STPIs, in line with exemptions already available in SEZs and extension of Tax Holiday for STPI units.”

Mr Devendra Saharia, Co-Founder & President, Ajuba Solutions India (P) Ltd:

“Continued allocation of resources to the education sector is a very positive sign. The challenge that we face today is not of unemployment, but rather of unemployability. ”

Mr Naresh Wadhwa, President & Country Manger – India and SAARC, Cisco:

“The exemption of customs duty on specified parts of set-top boxes and certain raw materials used in the IT/ electronic hardware, as well as reduction in excise duty on wireless hardware cards and customs duty on convergence products are welcome measures for the ICT industry.”

Mr Ajit Khandelwal, Vice-Chairman & Managing Director of BNK e-Solutions: The BPO sector is disappointed that the STP benefits have not been extended to it beyond March 2009. This will impact BPOs that have been set up in the last two or three years and those who are planning to set up BPOs. The latter may now have to wait for SEZs to come up. Shiva Ramani, Co-Founder and CEO, Cybernet-SlashSupport: The budget has not commented on the extension of the STPI scheme. This will necessitate small and medium enterprises to look for alternatives to manage the onslaught of taxes if the scheme is not reconsidered from next year. The impact of this budget on the rupee remains to be seen. This is a time to hold the rupee at current levels without allowing a further appreciation.

Mr Karthik KS, CEO of 24x7 Learning: A 20 % increase in the budget to Rs 34,400 crore would surely help boost this sector. I would surely hope that some portion of the funds be allocated to train/retrain the 3.5 million graduates who are passing out.

Mr. S.P. Srihari, Finance Controller, Zylog Systems: The government has presented a neutral budget towards the IT sector. With the current US slowdown, companies will have to struggle to sustain growth which gets compounded by the dollar fluctuation and rupee appreciation.

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