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Krishnakumar Natarajan: Tax regime should boost growth of smaller IT firms

Krishnakumar Natarajan
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Krishnakumar Natarajan
Krishnakumar Natarajan

The Indian IT Industry is looking ahead optimistically to build a $300-billion industry by 2020.

The short-term signals are positive and the demand scenario is looking far more positive than it was a year ago. But we need to be cautious as alternative locations are also emerging. It is critical that the Government sees both the economic and the social impact which the IT industry can create and accordingly provide the right enabling environment for the industry to thrive. In this context, the Budget 2013 becomes very crucial. My Top 5 expectations from the budget are:

Provide an incentive model to build products and intellectual property in India. We need to fast known as a nerve centre for innovation.

Sizeable investments in deploying technology in healthcare, education and governance. This will enhance quality of living and also stimulate domestic demand for IT-related services.

We must drive more inclusive growth. To ensure these, incentives must be given for IT industry to spread itself to Tier-2/Tier 3 cities.

The IT industry will grow and be innovative if smaller, nimbler companies are encouraged to grow and thrive. The current procedures and policy environment for small companies is stifling. A small entrepreneur has to deal with multiple taxes and 10 different departments. We need to make the operating environment friction-free for small entrepreneurs.

SEZ policy should do away with minimum, contiguous land etc. so that small and medium companies can also derive the benefits of SEZ.

There should be easy access to working capital for knowledge companies and the budget should articulate platforms for this.

(The author is CEO & Managing Director, MindTree Ltd.)

(This article was published on February 20, 2013)
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