According to the BSA, rise in software costs would hurt the fight against piracy which in turn would have an adverse impact on the economy. According to Ajay Advani, co-chair of BSA India, "Software is the driving force behind growth in the IT sector. Reducing the rate of software piracy can boost the economy and create new jobs and business opportunities that generate spending and new tax revenues. With the right policy choices, a new area of innovation, growth, and opportunity can spread across the country."

Says Kiran Karnik, president NASSCOM, "Increase in levies on packaged software and on IT hardware will result in higher prices at a time when technology and market demand were driving down prices. We feel this is an intended consequence of adjustments of excise, countervailing duty, etc and hope that the finance minister will correct this aberration. The increase in service tax and broadening the net to cover some previously excluded IT-related services will not only raise costs, but will act as a deterrent to outsourcing work to SMEs", he added.

According to a recent study by the International Data Corporation, a reduction in the software piracy by 10 points can have a significant impact on India's economy. It will add 115,847 jobs; contribute $5.9 billion to £$386 million in taxes and $8.2 billion in revenues to local vendors.

Advani added, "The long term advantage of not imposing taxes on software far outweigh the short term fiscal benefits. Ironically, if the government does not impose taxes at this time, the country stands earn significantly more in the future both in terms of tax revenue and from other areas."