IT Industry welcomes Budget 2010 with caution


Tvm: The 2010-2011 Budget presented by the Union Finance Minister, Shri Pranab Mukherjee has elicited a positive response from the IT Industry in general but with a word of concern. In Trivandrum, the Group of Technopark companies (GTech) have expressed appreciation to the Union Government for presenting a focussed and Balanced Budget, aimed at putting India back on the economic growth trajectory.

In a release, GTech said that the budget allocation for the Infrastructure, Agriculture and Health sectors would ensure the sustainable growth of the Indian Economy. Appreciating the Finance Minster for Fiscal Prudence in containing the Fiscal Deficit to a new target of 5.5 %, GTech felt that this would send a positive signal to Investors on India’s Economic Outlook. 

In a statement, Kris Gopalakrishnan, CEO & MD, Infosys Technologies echoed similar views, “The Finance Minister has presented a budget that has been focused on fiscal consolidation. The projected reduction in the budget deficit to 5.5% – down from 6.8% is a positive development as the country strengthens its growth after the recovery from the global recession.”

“The highlights of the budget include the reduction in the fiscal deficit, an increased investment in infrastructure, revision in the personal income tax slabs and the enhanced focus on e-governance. However, the increase in excise duty, crude oil and petroleum products is a cause of concern, as they are inflationary in nature. In addition, there has been no focus on higher education in this year’s budget”, he added.

GTech welcomed the proposals in the Budget like changes in the Income Tax Slabs, Surcharge reduction to 7.5 %, maintaining the status quo on service tax, Implementation of the Uniform Direct Tax Code and Goods Services Tax (GST) by April 2011 and Simplification of the refund of the accumulative credit to exporters in the IT and the BPO space. The thrusts laid down by the Finance Minister on the urban and rural development and also increase in the budget allocation for NREGA would help in the inclusive growth of the economy.

However GTech expressed the IT Industry’s disappointment for the increase in MAT from 15 % to 18%. This increase in the MAT would hit the mid size IT companies operating in the state. GTech also felt that Union Government should consider extending the STPI scheme till 2015 to support the IT Industry operating in Tier 2 and Tier 3 cities.

GTech also noted the appreciable efforts taken by the Government in laying down a fiscal deficit management roadmap and also the emphasis to attain a GDP growth rate of 10% in the near future.

Anil Philip
Kerala IT News


Comments are closed.