Budget Agenda II

Just one week remains for the union budget of the year to be presented by Yashwant Sinha, the Union Finance Minister, in the both houses of the Parliament. As usual, there are all kinds of speculations going around in the industry regarding a number of new taxes being imposed to generate resources for the earthquake ravaged Gujarat. And this speculation is not without any basis as Sinha has been reiterating in all public foras that people will have to do a lot of belt tightening.

Now it remains to be seen as to how far it turns out to be true. But that has not stopped various industry associations to present their pre-budget memorandums to the finance ministry. And all of them had plenty of recommendations to make.

As usual, the field has been led by NASSCOM, which submitted a seven point proposal to the Finance Minister. It sought the Government's continued support to software and IT services. The association wants the government to continue with the incentives, further simplify the procedures, implement more economic reforms, reduce the cost of computerization, spend more towards the setting up of IITs and IIITs, and boost Internet and e-commerce activities.

Without doubt, the most important recommendation of NASSCOM is about setting up of more IITs and IIITs. It says that the government should plan for at least one such institute in every state by the end of the tenth five-year plan. Even more important is the recommendation of outlay Rs 1,500 crore during the next fiscal for upgradation of 43 Regional Engineering Colleges to the level of IITs.

If just this one recommendation is implemented by the government, the entire industry will unitedly stand up and applaud Sinha as quality manpower availability is the most crucial issue facing the software industry today. Although in terms of quantity, there is no dearth of manpower, the key issue here is the quality of manpower. In other words, there are just not enough technically qualified people available in the market today, notwithstanding the fact that India has one of the largest base of highly-skilled, English speaking programmers and software developers.

Apart from this one major issue, the other demands of associations like MAIT, CPMA, DCTA etc are concerned more towards procedural issues rather than anything concrete. The recommendation from DCTA which demands that uniform sales tax should be implemented is of some significance, though. This is again a very important and long-pending step, which the government needs to take, in order to reduce the problems faced by the reseller community.