TN budget receives mixed response

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All India Anna Dravida Munnetra Kazhagam (AIADMK)presented its first
budget on August 4, 2011, after winning the elections in May this
year. The Tamil Nadu finance minister, O Panneerselvam has received
mixed responses from the channel community. For the dealers, the
'nearer and dearer' topics of the budget are power-cut, new IT
policy and the supply of free laptops. However, the budget has
assured that all the problems will be addressed. The budget has
proposed to take up power generation projects of 3,800MW at a cost of
Rs 22,800 crore to meet the power crisis in the state which is a
nightmare for dealers. To improve the power situation the government
has decided to prioritize the issue and has assured that the problem
will be completely solved by August 2012. It is to be noted that
scheduled and unscheduled power cuts have affected the dealers in
both urban and rural areas of Tamil Nadu. “The key aspect of the
budget is the new IT policy which deserves our appreciation and we
expect that it will help every stakeholder in the business,” said R
Mahesh Kurup of Ozone Computers, Coimbatore. PN Prasad of Microplus
Computers, Puducherry, said that even though the government assured
to give free laptops to students from September 15, it has not
affected the business as colleges have reopened and students have
already started buying the laptops.

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IT export of the state during FY 2010- 1 was Rs 40,000 crore which is
a lion's share of the total revenue of the state. The budget has
also assured that the IT and ITeS companies will be encouraged to
start new projects in tier-2 cities. Many in the channel community
believe this to be a good opportunity in the forthcoming days. On the
dark side, there are also some voices against the budget. H
Chandalia, secretary, Chennai Electronics and IT Association (CEITA)
terms this budget as 'unsatisfactory'. “The recent hike in VAT
on electronics products has curbed the business of IT traders to a
large extent.” Chandalia also said that Tamil Nadu being the second
largest electronics market in the country, the government should
consider the needs of the market by decreasing the VAT rates.