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Budget 2012: IT Industry Expects....

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DQI Bureau
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Budget 2012









Dr
Alok Bharadwaj, Senior Vice President Canon India
style="font-weight: bold;">

The budget is a great opportunity to build investors' sentiments and

remove anomalies which is vital for growth. Announcement to make India

an attractive destination for manufacturing. Reforms like GST, DTC and

reforms in areas of agriculture, mining & removal of inverted

duty

structure etc will help boost the growth, job creation &

productivity.






Naresh Wadhwa, President & Country Manager, Cisco India and
SAARC





India has already made its

mark in the global technology map. However, in order to become a nation

to reckon with, there are a few basic hurdles it needs to overcome in

terms of broadband penetration, financial inclusion, education and

healthcare.



Empowering rural India is of utmost importance and the government needs
to do so by provisioning for broadband penetration and financial

inclusion. In fact, according to Indian Council for Research on

International Economic Relations, for every 10 per cent increase in

Internet and broadband connections, India could contribute up to USD 17

billion to the GDP. With this in view, the government is on the right

track with its allocations last year to connect over two lakh

Panchayats in three years. However, it will be necessary for the

government to take more steps in this direction.



Access to quality health care is another key to achieving rural
empowerment. The budget for this segment was raised marginally last

year and it would be good to have an allocation for rural health care

programs with provisions for technology that would help modernize this

sector to expand its reach through remote healthcare solutions and

telemedicine.



Furthermore, the government announced a big budget campaign
’Swabhimaan’ in the budget last year to promote

banking and provide services to about 20,000 villages. In order to meet

this goal, the budget this year too would need to make provisions

accordingly. This will also create opportunities for the IT and

infrastructure sectors to help banks reach the unbanked and bring the

bulk of the country’s population into the banking fold.



The industry has been facing  a shortage in skilled workforce
for some time now. To bridge the industry and academia divide, it is

important for institutions to introduce more vocation oriented courses

at the plus two and degree levels and the government should take steps

to incentivize this. By 2025, a majority of our young population will

enter the workforce. To empower them to contribute meaningfully to the

economy, it is imperative for the government to ensure that the most

basic criterion – education – is met. Last year,

the union budget increased allocation for the education sector by 24%.

It included grants for leading institutes, Sarva Shiksha Abhiyaan,

post-matric and pre-matric scholarships etc. It is encouraging and

important to create a skilled workforce necessary for our

country’s growth, and hopefully this year’s budget

too has a similar allowance.



The setting up of the National Knowledge Network is also a significant
step in helping to take higher education in the country, to the next

level.







style="font-weight: bold;">Vsevolod Rozanov,

President and CEO MTS India 



Equally significant is the fact that broadband penetration in India
stands at just 1% as against the wireless teledensity of 74%. With the

national broadband plan envisaging 160 million broadband connections

including 60 million wireless broadband connections by the year 2014.

There does exist a need to support this growth path. Levy of zero

service tax on internet and broadband service would certainly act as a

catalyst in this process.






Anil
Valluri, President, NetApp India 




While administrative reforms, fiscal consolidation and inflation
management were the foremost concerns of the government last year, the

downward trajectory of the GDP curve should drive the government into

pushing big ticket reforms this year. Private industry in general will

have higher expectation than normal, and is hopeful of action on fronts

like further liberalization of the FDI policy, enhancing of

infrastructure spend and rollout out of the GST, among others.






Narendra
Nayak, Director Sales, CSC India  
style="font-weight: bold;">

I believe that the time is apt for the finance minister to display

positive intent in taking economic reforms and liberalization to the

next level. The world is undergoing a transition from an internet

economy to an ‘As- a -Service’ economy and for

India to realize its

full benefit, this budget should display adequate vision to achieve

last mile broadband connectivity on priority. It acts as a major

hindrance towards the country trying to maintain its leadership

position in the IT world. The government must also spend on upgrading

technology infrastructure in the country as well as invest heavily in

e-governance. This will serve many purposes. It will create demand

locally, bring efficiency and transparency to government, as well as

improve education through e-learning."






Saurabh
Srivastava, Chairman, CA Technologies




For India Inc. to be able to rise and flourish, it is important that
the Budget, as a statement of intent, expresses the long term proposal

for the economic stability besides radical reforms in taxation space,

which the industry today yearns for. Aspects like, Service tax refunds,

further adoption and expansion of IT, Duty corrections, strengthened

delivery mechanisms, fiscal balance, incentive for growth and clearing

all uncertainty pertaining to tax regime, need to be of prime focus.

With forward looking policy announcements & structural

corrections,

the 2012 budget could be a great opportunity window for finance

minister to inject both sentiments & substance to growth

renewal.






Jaswinder
S Ahuja, Corporate Vice President and MD, Cadence Design Systems




For the year 2012-2013, the Union Budget should address the challenges
of keeping the economic engine running in the midst of the global

uncertainties that can have a ripple effect in India. Closing of the

fiscal deficit without impacting the GDP growth rate; promotion of

inclusive growth initiatives are some of the key areas that we hope the

budget will highlight. To this effect, technology can play a big role

in helping India overcome infrastructure challenges as well as resource

deficiencies that we face.



For the semiconductor industry, the coming year will be characterized
by opportunities and challenges, especially given the push towards the

formation of a National Policy on Electronics to help India kick start

its nascent local manufacturing industry and become a global hub of

excellence for the design and production of electronic goods. To

encourage and stimulate the domestic industry and promoting locally

designed products, there is a need for tax exemptions and R&D

grants. Some of the pivotal issues that need to be addressed in the

2012-2013 Union Budget centre around semiconductor design, high-tech

manufacturing, encouraging pre-competitive research, and amendments to

tax and duty structures. Favorable policies addressing these areas will

support the domestic semiconductor industry to compete aggressively in

the global market, as well as encourage the growth of the local market.



There is need to push forward the much-needed reforms and pending
legislations. The Government needs to take urgent steps in the passing

of the long overdue Companies Bill. The early implementation of the

Direct Taxes Code and the Goods and Services Tax are also important






style="font-weight: bold;">Deepak Mehrotra, CEO,
Micromax Informatics



Currently, most of the devices sold in India are manufactured abroad,
largely due to the cost of sourcing efficiency and economies of scale.

There is an opportunity for a policy initiative to promote indigenous

manufacturing and India being a large market, can evolve as a

manufacturing hub. This would have the attendant benefit of spillover

growth in the adjacent electronic /component industries. We also expect

the government to promote m-commerce and m-banking to facilitate mobile

penetration further which can be a great boost up for the growth of the

country as well as for the consumers. We would welcome a move from

multiple vat rates to a uniform GST applicable across the country.






M
P Vijaykumar, Chief Financial Officer, Sify Technologies




While fiscal deficit has to be necessarily lower, significant
Government investment is a must towards education, hospitals and

infrastructure, which will trigger all round growth. The structural

reforms long overdue on DTC, GST and Company Law reforms should be

allowed to happen. This apart, tax administration has to be more

efficient and tax payer friendly, if industry has to see double digit

growth and also get more FDI.



Mohit Anand, MD, Belkin India Sub-continent;


The implementation of GST is a critical growth lever for the IT
industry we are hopeful that it will find a mention in this year's

budget, this would phase out major taxes like excise duty, VAT, service

tax, will be instrumental in unifying the markets in term of local

taxation, which will bring down overall cost of goods and

services.”






style="font-weight: bold;">Naveen Aggarwal,
Partner-Tax, KPMG



IT-ITES sector is struggling with increasing costs and global
uncertainty, keenly await relief in the forthcoming Budget.

The tax holiday for Software Technology Parks/ Export Oriented

Undertakings expired on 31 March 2011, while no extension was

considered in last year’s budget, the industry is still

lobbying for re-introduction of tax holiday especially for SMBs to cope

with pricing pressures and lower margins. Minimum Alternate Tax/

Dividend Distribution Tax exemption was withdrawn for Special Economic

Zones (SEZs) units last year, re-introduction of these exemptions would

be welcoming.   






Vivekanand
Venugopal, VP& GM, India, Hitachi Data Systems




In today’s Information Economy, lack of information and
mismanagement of information are fundamental inhibitors to national

productivity and global competitiveness.  The Government needs

to provide the necessary stimulus for business to build intelligent

information infrastructure to increase internal consumption and compete

in the Global Market place.






style="font-weight: bold;">Jagdish Mahapatra,
Managing Director, India and SAARC, McAfee

 



We hope the Minimum Alternate Tax which levied taxes on SEZs, severely
affecting foreign investments in India is discontinued or reduced

drastically. In this budget, we hope that the government enables more

options in tax, pension and similar activities through an online

platform to make it convenient for Indian citizens.



Finance Minister has to clearly demarcate the line between treating
software as goods or services. Hence relevant taxes can be imposed and

companies can comply with the appropriate laws. As the software

products industry is largely reliant on the channel ecosystem, the

government should consider reduction of TDS for software resellers from

the prevailing 10% to 1-2% to align with the corporate tax rate.






Sanjaya
Sharma, CEO TATA Interactive Systems




In the last budget the Government had increased allocation for
education by 24 per cent over the previous year. The National

Innovation Council was also set up to prepare road map for innovations

in India. India has proved time & again that we are a global

leader in technology and this can be the precise key to unlock and

unleash the power of our true potential. We believe that the Government

will continue to rigorously invest and promote investments in IT

infrastructure. This will be crucial in connecting even the outmost

schools which in turn will enable education as a fundamental growth

process for the country.”






Koji
Oda, Managing Director at NEC India




Government’s attention in the upcoming Union budget is
towards advanced healthcare facilities for the people is desirable. As

per the research, Government's long term vision of making quality

health care affordable, at least 50 per cent of country's population

should be covered by health insurance by 2020. Taking cue from this

revelation, we expect the process to be expedited largely with the help

of technology. Hence, an increased budgetary allocation will enable

healthcare companies to invest in IT and improve upon their service

efficiency.






Lakshman
Narayanaswamy, Co-founder & VP, Sanovi Technologies
style="font-weight: bold;">

Investments in R&D are vital to a software product company, we

look forward to the finance minister giving incentives to Indian

product companies to help develop world class software products.






Kamesh
Ramamoorthy, COO, Ramco Systems
style="font-weight: bold;">

Government should provide necessary infrastructure and tax exemptions

to encourage product development and R&D from India. Strong

focus on promoting Small and Medium Enterprises as they are the torch

bearers of the future economy. Initiatives such as Bringing back the

special subsidies given to SMEs for investments in IT will help in

faster adoption of IT among the SMEs; Easy loans, and better interest

rates. Single tax code that will ensure common tax structure for

software and commodities will help in substantial savings. This will

simplify the tax structure and make it easy to interpret for all.






style="font-weight: bold;">Rakesh Mistry Chief
Financial Officer Elitecore Technologies  



Our key expectations from the Union Budget 2012-2013 are withdrawal of
the 20% Minimum Alternate Tax (MAT) for SEZs; see implementation of

long-pending GST so that there is no ambiguity in tax structure and

also DTC, IFRS, New Company Bill. To reduce fiscal deficit,  I

recommend a definitive policy on the phase wise  reduction in

subsidy for  diesel, LPG and fertilizers helping to lower

inflation, interest rates and prevent currency fluctuations in

Forex.

Finally, it would be great if individual tax limit is raised to Rs. 3

lakhs as that would go a long way in boosting economic activity.






S
Raman, Managing Director, LSI India




India is a leading destination for hardware design in the world, in
particular, design of semiconductor products.

India’s leadership in electronics design is getting global

recognition, I hope the new budget brings out specific policy measures

that augment India’s leadership and encourages an

entrepreneurial ecosystem in India.



“Inspite of the numerous challenges being faced by the Indian
telecom industry, the 2012 budget presents yet another opportunity for

the government to set some systemic elements right. From a global

perspective, the telecom industry in India attracts the highest tax of

23%. Looking in AGR terms, the industry generates revenues of approx.

Rs 122,000 crore, out of which Rs 28,000 crore is the approx. outflow

to the exchequer. This needs to be rationalized on a priority. The

telecom industry is clearly getting squeezed on account of such

outflows and what makes the situation all the more difficult is the

hesitation of banks to lend money to operators. All this naturally has

a deep impact on the roll out of voice and data services for the common

man, specially in the rural areas. 






style="font-weight: bold;">Mahavir Chand, Managing
Director, GoDB Tech



Government has taken proactive steps to reduce the cost of the 3G
Handsets. For mobile productivity applications, we require penetration

of good (3G) mobile data connection. If Government could provide sops

to Telecom operators for providing 3G connectivity in Rural markets, it

would increase the penetration of Mobile productivity applications like

Education, Healthcare, Mgoverance.”



















































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