LG Electronics India
Moon B. Shin, managing director, LG Electronics India, "The management of the economy is the responsibility of the government and we must compliment the government for the same. The budget 2008 has exceeded expectations in terms of rural development, education and agriculture. It is commendable that the economy has seen a growth rate of over 8.8 per cent. This budget will provide an impetus to inflation control. Specific to LG India, there will not be any major changes in terms of product pricing as there has been no major relief in duties. We welcome the relaxation in excise duty from 16 per cent to 14 per cent.
However, for a manufacturer, as we are exposed to open competition with the various ASEAN countries, some relief on raw materials and intermediate goods would have made our industry competitive globally.
On the whole, it is extremely favorable towards the agricultural community. The various reform measures announced moves at improving the health & the farming sector in the country. This would also result in the upliftment of the economy as steps have been taken towards improving the lifestyle of the farmers. This would further create additional markets, which is an encouraging sign.
Overall, I foresee an improvement in the macro economic condition of the country as this Union Budget proposes to boost agriculture, health and rural industry.
Cisco
Naresh Wadhwa, president and country manager - India and SAARC, Cisco, ""The Government has delivered a progressive budget by focusing equally on infrastructure and rural development, education, healthcare and employment generation, with proposals to help create a climate for balanced growth.
The vision to drive inclusiveness through technology gets a definite impetus with the proposals to set up 100,000 broadband-enabled common service centres in villages, connecting knowledge bodies and providing major universities with broadband services. Allocation of funds to accelerate power reforms and construction of roads will boost infrastructure development. The approval and fund allocation towards the state data centre scheme will help take the benefits of IT to the grassroot level.
Encouraged by the 5-year tax holiday, I expect increased investments in non-urban areas in healthcare from both Indian and international players. The allocation towards Education is also encouraging.
On the taxation front, the reduced tax burden will be a relief to individual tax players. It would have been a boon for Indian industry had the same been applied to corporate taxes. However the exemption of customs duty on specified parts of set top boxes and certain raw materials used in the IT/ electronic hardware, as well as reduction in excise duty on Wireless hardware cards and customs duty on convergence products are a welcome measure for the ICT industry."
Sify Technologies Ltd
Vijay Kumar, CFO, Sify Technologies Limited, " This the right time to stimulate the economy further to continue our growth path, and that’s exactly what the Finance Minister has attempted. The measures on income tax revision, reduction in the general CENVAT rate on all goods from 16 per cent to 14 per cent to stimulate the manufacturing sector, reduction in duty on convergence products from 10 per cent to 5 per cent and full exemption from duty specified parts of set top boxes and specified raw materials for use in the IT/electronic hardware industry are all welcome steps.
However, it is disappointing that corporate taxes have not been reduced to stimulate growth even further. It is also unfortunate that the service tax on cyber café and broadband services have not been removed, nor has the duty on PCs and laptops been brought down further. These would have been positive measures to spur the growth of PC and Internet penetration and use in the country at a time when we are faring very poorly compared to even other developing countries."
NASSCOM
NASSCOM: "NASSCOM and the IT-BPO industry welcome the fact that the Union Budget is inclusive and has a strong focus on the social sector."
NASSCOM is however disappointed with the absence of any discussion on the extension of the STPI scheme. This is extremely critical for small enterprises and the BPO industry, as well as for expansion in tier 2 and tier 3 cities as they are unable to avail the benefits of the SEZ scheme. The STPI benefits are available till March 31 2009 and we are hopeful that through continued dialogue we will be able to convince the Government to consider our proposal and help India garner the large opportunity in this sector.
We have seen the advantage of IT deployment in the country. However the imposition of service tax of 12% on customised software and higher excise duty on packaged software could lead to increased cost of IT and could slow down the IT usage in the domestic sector. This impacts in particular, small and medium enterprises who have just started deploying IT.
The IT-BPO industry is talent and skill intensive and in this light, we particularly welcome the thrust on primary and higher education and skill building initiatives. The Sarva Shiksha Abhiyan1, increased allocations for higher education2 and the creation of the Skill Development Mission3 with the announcement of Rs. 1,000 crore as Government's equity in this proposed non-profit corporation will ensure constant supply of employable workforce to this sector. Interconnecting the knowledge institutions through broadband would also establish synergies across educational institutions.
We are happy with the new initiatives on setting up rural service centres and state data centres as they would help take the benefit of IT to the masses.
While the Budget does resolve some existing anomalies, we would continue our dialogue with the Government on removing the inequities and procedural issues such as those relating to provisions of Section 10AA for units in SEZ, advance pricing agreements etc.
Acer
S Rajendran , CMO, Acer India, "Full credit to the finance minister in balancing various competing requirements and making some bold announcements that benefits the important sectors of education, health and agriculture.
We welcome increased allocation to SSA & Education & expect this to have a positive result for us as Acer is the leading brand in this space. In the same context we welcome 1 lakh rural information centers, Allocations for SWAN & the state data centers. It is a pointer that Hon. FM appreciates the importance of deeper penetration of IT as a leveraging force for Economic development.
We would have liked minor obstacles to have been put out of the way for deeper IT penetration. These are: (1) Continuation of 4 per cent Special additional Duty, which in any case is to be
refunded subject to some laborious documentation. (2) MRP related CVD payment has pushed up IT hardware cost by 4 to 7 per cent. (3) Excise increase on operating system from 8% to 12%, that has been newly introduced. (4) Though some releif has been mentioned on cenvat duties for some hardware items, at this time we are not clear what are these and we will have to wait till we are able to see the particular notifications.
We wish there was relief in the budget to reduce IT hardware cost and make it more affordable.
Aspir Systems
Gowri Shankar, CEO, Aspir Systems, "Budget 2008 has been presented with a very clear eye on the upcoming elections and nothing noteworthy has been done to further the reform agenda. The focus on primary education is a good step and is long overdue. Setting up 6000 "high-quality model schools" is an excellent initiative, but we need to wait and watch its actual implementation. Conceptually, this should help reform primary education and keep it in tune with the changing needs of a knowledge-driven economy. Setting up newer IITs, central universities and national knowledge centers and increasing merit scholarships will enable India to maintain its lead as a destination for good talent.
Mastek
R Desikan, group CFO and finance director, Mastek, "From the IT sector's perspective, this Budget has been a mixed bag. The thrust on education and increased allocation for additional higher centres of learning is encouraging, as it will benefit all knowledge-intensive industries including IT. For the IT industry under rupee appreciation pressure, we were expecting relief from service tax to firms operating in STPIs, in line with exemptions already available in SEZs and extension of Tax Holiday for STPI units . The budget is silent on the tax regime simplification by having Adanced Pricing Agreement pre approval . Enhancement of excise duty on packaged software adds to the challenges faced by the industry . "
S Nagarajan, co-founder and CPO, 24/7 Customer, "Union budget 2008 is a populist budget and has been entirely focused on the benefits to the common man, agriculture and manufacturing sector etc. With the dynamics of the global economy and rupee fluctuation, respite on the MAT, extension of tax holiday, stability in transfer pricing would have been appreciated. The ITeS sector will continue to face the same challenges as last year."
Intex Technologies
Ramesh A. Vaswani, executive vice chairman, Intex Technologies, "As expected, the budget is focused on election year issues. Write-off of farmer loans to the extent of 60,000 cr satisfies a pressing demand but, continuing to exempt agricultural income from tax, places the entire burden on the small tax payer base. Increasing shortage of employable educated and trained manpower has been
addressed by increase of 20 per cent for education and setting up of a non-profit corporation to initiate world class programmes for development of workforce skills in mission mode. In IT hardware, it is disappointing that exemption from customs duty has been restricted to very few items. Whereas, additional funds have been allocated for broadband Common Service Centres, Data Centres and SWAN's to take benefits of Internet to the rural areas, a coordinated approach to bridge the digital divide is still missing. A special programme to take Internet to every Panchayat and school and make the basic PC more affordable is the need of the hour. "
Sage Software India (P) Ltd
Thomas Abraham, managing director, Sage Software India (P) Ltd "Main focus of this budget has been 'Aam Aadmi' as expected with numerous schemes announced across sectors. It remains to be seen how the implementation and monitoring would happen. The 'Aam Aadmi' approach has extended to IT as well with emphasis on enhancing connectivity in rural areas through 100,000 broadband-enabled common service centers to be set up in villages. Bulk of the enhanced IT related funding is targeting rural areas and the states. Also good to see emphasis on Higher Education with plans to set up more IITs and Central Universities - much needed given the predicted shortfall in qualified Manpower. I was also surprised to see hike in Excise for packaged Software with no specific rationale outlined. We also await more details on how SMEs would benefit ? Overall I would rate this budget 7 on 10"
Gemini Communications Ltd
Ram Kumar, executive director, Gemini Communications Ltd., "There is little to cheer about for the IT industry in this budget. There is no worthwhile mention of schemes to incentivise the IT Hardware sector. Maybe rightfully so, the FM has left the Software sector to handle its challenges themselves, after many years of handheld support. The IT Hardware sector should have been looked into. Wonder where all the suggestions from MAIT went ?"
Four Soft Limited.
Biju Nair, Sr.VP-Finance, Four Soft Limited.," For IT industry this is neutral budget. No measure has been taken to support industries suffering on account of rupee appreciation and likely slowdown in US
economy. Rationalization of FBT on ESOP, reduction in corporate tax and dividend distribution tax rate, which were much looked for, has been ignored. The thrust given to education and social welfare is appreciable, which were in fact anticipated considering that this will be the last budget before elections."
Frost & Sullivan
Sourabh Kaushal, industry manager, Frost & Sullivan, South Asia and Middle East, "New announcements or amendments announced in Union Budget 2008-09 where education spend has been increased by 20 per cent, plans to setup 6000 model schools, plan to bring National Knowledge Network and 16 Central universities. A part of this increased spend is expected to go to IT Hardware and telecom sector.
"Financial inclusion – 250 Rural HH accounts per rural and semi-urban branch and funds to NABARD / SIDBI / NHBs for the same . This would drive the Banks and RRBs to look for IT solutions that would reduce their cost of transaction to serve the un-banked population. Huge opportunity for IT and telecom sector in long run.
Setting up of healthcare delivery system could only be possible through effective use of IT/telecom, a part of spend expected to go to ICT Industry 100K Broadband Rural Kiosks (75 Crore) SWANS (475 Crore) State Datacenters (275 Crore).
Direct benefit to Telecom Sector. Looking at the potential this is miniscule but is definitely a move towards right direction. Would lead to huge opportunity in Mid to long term (3 to 5 years).
Excise on packaged software increased from 8 per cent to 12 per cent and service tax on customized software would lead to increase in the price of software for both the masses as well as enterprises.
We expected the Finance Minister to extend the STPI scheme and also to rationalize the fees, taxes and duties applicable on the telecom sector, but this was not even touched upon by the minister in his budget. From IT and Telecom Industry point of view, apart from few small indirect positives, it was a lackluster budget. |
