The Union budget presented today gives a long term direction to inclusive growth, Infrastructure development, Education and employment generation of 12 Million jobs a year.
In terms of the Impact on the IT industry, steps like the scrapping of the FBT, extension of the 10A benefits till 2011, increase in the MAT credit period to 10 years and increased allocation to education are welcome steps. However, steps like the increase in MAT from 10 to 15 per cent are going to have an adverse impact on the Industry in the short run and this is something we could have avoided.
We believe there are additional steps the Government should consider in the few months to boost the IT industry. These include the extension of the 10A benefit for a period of 5 years(the current extension while it benefits the companies in the short run it doesn't not lead to new investments to come into the industry), allowing free movement of business between STPI Units and SEZs,and specific incentives to SMEs.
On the personal taxation, while the increases in tax limits are nominal, the removal of surcharge on income tax will benefit number of employees in our industry.
The Industry also welcomes the planned outlay of Rs. 2100 crores to create 'Educational infrastructure' including setting up IIT's and interest waivers for educating students. These reforms will clearly bring in a manifold resource increase for employability in the technical stream.
While the Government is taking steps to improve the Quantity & Quality of Human Resources, we believe some incentives for speedier job creation would help in the current global economic scenario.