Budget elicits mixed reactions

Yes, the Finance Minister Pranab Mukherjee might have disappointed the Sensex,
but he has succeeded in winning the accolades of his fellow party men and the IT
industry. When the budget was being announced on June 6, the Sensex bull tanked
869 points. True the Budget, which aimed to build a successful post-election
platform and please the aam janta when there is a worldwide economic downturn,
was successful in doing so. Saket Kapur, General Secretary, PCAIT, Delhi
commented that the Budget has been entirely business-friendly. “Continuation of
Exide Duty reduction, doing away with the Fringe Benefit Tax (FBT), and
confirmation of implementation of Goods and Services Taxes (GST), which will be
of a great boost for both print and all media companies, is definitely a good
move,” he opined.

Sharing his reactions to the Budget, Pawan Jajodia, President, Compass,
Kolkata said, “Demand was not there, hence nothing much was expected from this
budget.”

However, there is also a section of people who are not very pleased with the
Union Budget. Prashant Ugemuge, President, VCMDWA, Nagpur said, “Government
should stop misleading people. Because on one hand they are saying that mobile
and PC prices have gone cheaper, on the other hand during the Maharashtra
Budget, the government increased VAT from four to 12 percent. It is us who face
the challenges, because we work on very thin margins.” He added that when the
government is planning to create Internet facilities in the villages, why can't
they give loan wavers to farmers to buy PCs for their children's education. “I
strongly feel that they should build free Internet cafes and give away PCs for
free or at cheap prices, which would also increase our business,” he added.

PN Prasad, President, Confed was of the opinion that there was nothing
IT-centric in the budget. “It will not be a catalyst for growth of the IT
industry. But status quo has been maintained,” he said.

MAIT has appreciated the thrust towards sustaining the national economic
growth and making it inclusive. It even expressed satisfaction over the thrust
given to infrastructure development, upliftment of the rural economy and launch
of several schemes towards promotion of education, especially among the socially
and economically backward. Vinnie Mehta, Executive Director, MAIT, said, “We
welcome the government's decision to maintain the current excise and custom duty
levels on IT products and components.”

Even Nasscom welcomed the Budget which aims at achieving the dual objective
of enhancing the inclusive growth and boosting economic activity in India. The
recent budget has even recognized the contribution of the IT-BPO industry which
accelerated India's economic progress and provided necessary measures to boost
the sector. “Many of the initiatives in this year's budget recognize the role
the IT BPO industry in creating substantial employment opportunities. The
industry will be keen to partner with the government in expanding e-governance
initiatives including modernization of employment exchanges, the UIAD project,
and smart cards for healthcare services so as to achieve enhanced governance.
Increased capital outlays on the education and infrastructure sector will also
address growth challenges that the country has faced,” said Pramod Bhasin,
Chairman, Nasscom.

Ramkumar Subramanian, VP-Sales and Marketing, AMD India, said, “The policies
will help social sector spending that is bound to kick start the economy.
Measures like these will create liquidity, and bring money back into
circulation.”

Positives of the Budget were definitely the launch of Unique ID, reduction on
the duty cuts of LCD. “Higher financial inclusion will mean better opportunities
for IT by upgrading the rural exchange, allocation and dependence on IT for
successfully implementing NREG, infrastructure development etc. Even more IITs
and NITs will lead to enhancing better skill sets which is very positive thing,”
said Girish Trivedi, Deputy Director-ICT Practice, Frost & Sullivan, South Asia
& Middle East Impact.

Sunil Jose, MD, Sybase India added, “The most welcome change is the complete
removal of the FBT. Its provisions were felt to be too burdensome and generated
a huge administrative liability on corporate.”

Naresh Wadhwa, President and Country Manager, Cisco, commented, “On the face
of it, the budget put forth by the government is positive and focuses on
inclusive development. Leveraging technology as a tool for accountability,
better governance, in business and administration is a step in the right
direction. The allocation of funds for e-governance investment schemes like the
unique identity number for every Indian and the formation of a Centralized
Processing Center (CPC) in Bengaluru to process electronically filed tax returns
will enable effective delivery of public services through public private
partnerships.”

The refinancing of 60 percent of commercial bank loans for the PPP projects
in critical sectors like telecommunications, power generation, airports, ports,
roads and even in railways will definitely be very encouraging for software
vendors who predominantly provide IT solutions like business intelligence and
enterprise mobility in these segments.

Other encouraging measures include the Mission in Education through ICT,
which has been substantially increased to Rs 900 crore and the provision for
setting up and up-grading of Polytechnics under the Skill Development Mission
has been enhanced to Rs 495 crore. Ajai Chowdhury, CEO and Chairman, HCL
Infosystems feels that the overall this budget is good for the IT sector with
certain facets which are especially encouraging for this sector.

“We are going through a very crucial time hence we weren't expecting much
more from this budget. Overall it has pleased us. Our pre-budget wish list has
been fulfilled. Some more insight into source of revenue to fund 6.8 percent
deficit from earlier 2.6 percent and disinvestment plans would have been
appreciated. Otherwise this budget is more in keeping the long-term perspective
in mind,” said Gautam Ghosh, Country Manager, ViewSonic.