Budget 2004: Expectations Belied?

The convener of the pre-budget CNBC panel in Mumbai and everybody I have met
in the last few days after the budget was announced had a common theme-the
software industry must be relieved that there will be one more year of tax
relief! Strange that an industry which has put India on the global map and is on
a path that will generate two million new jobs by the end of the decade should
continue to be put under the microscope and prove its worth every year when a
budget exercise commences.

Everybody has said it but it's worth repeating that this budget is truly a
mixed bag for the country at large and also for the Indian IT sector. A few
steps in the right direction like the wholly unexpected increase of FDI in
telecom and the elimination of duties on computer hardware which should give the
domestic sector, particularly e-Governance the much needed boost. But a few
critical areas have been ignored, like the much need clarification on the
distinction between core and non core activities that has put a cloud over the
BPO sector.

Ganesh Natarajan The dream team of Manmohan, Chidambaram, Montek and Kelkar has delivered quite a few signals of future intent that should give us confidence that the country is moving in the right direction

Being an eternal optimist, I would like to believe that political
brinkmanship apart, the dream team of Manmohan, Chidambaram, Montek and Kelkar
has delivered quite a few signals of future intent that should give us
confidence that the country is moving in the right direction. The focus on
primary education is a welcome step and something that many of us have been
advocating for a decade-that the government should stay away from professional
tertiary education and build the education system at the primary level.

The focus on Special Economic Zones is also welcome and one of Nasscom's
recommendations for the budget which was to enable high quality education
institutions to be set up in specially designated zones may well be implemented
sooner or later. This would enable resource providers to the IT industry to
enjoy the benefits that today accrue to STPs and EPZs like duty free import of
equipment can transform the technology in education and significantly change the
resource availability situation in the country in the next few years.

What is my vision of an education cluster within a Special Economic Zone?
First, a truly world class set of courses taught by world class faculty members
who would be paid in accordance with international standards through specialty
chairs instituted and funded by the IT, BPO and Biotech industries. Supporting
this would be a technology center that could support the entire education
cluster within the zone through e-Learning Delivery technology and facilities
for planning, monitoring and controlling a truly blended model where the core
content would be delivered in the classroom or laboratory and all prerequisite,
reinforcement, remedial and lifelong learning modules would be delivered through
the web on and off the campus. Combine all this with a content software facility
that would develop compelling content in a variety of technical and behavioral
areas and you would have a model blended education facility that would
complement the best of software companies and be a substantially superior
alternative to what all of us are doing today-training our own people at great
time and cost.

What are the other aspects of the Chidambaram budget that I like-for one
the focus on rural India-which will happen directly through education,
employment guarantees, water restoration and agricultural subsidies and
indirectly though the improvement in teledensity and insurance facilities that
the new budget will definitely ensure in the mid term. There are of course
doubts about the ability of this government like all its predecessors, to
implement these ambitious programs and the inability to achieve the ambitious
containment of the revenue deficit.

But then, an optimist sees the vision of a better future that all of us in
India see so clearly and if we suspend our disbelief and reduce our natural
cynicism, this budget may well be a precursor to some sweeping changes that the
Manmohan-Chidambaram duo will unveil in seven months' time.

The author is deputy chairman & managing director of Zensar
Technologies and chairman of Nasscom's SME Forum for Western India Ganesh
Natarajan