Industry

Lok Sabha Passes Finance Bill 2007



The Lok Sabha has passed the Finance Bill, 2007, including the amendments
introduced by the government. Venture capital funds investing in infrastructure

facilities will now get the benefit of pass through status which will boost

telecom sector. In the case of ESOPs, there has been no change in the original

proposal to charge FBT on the date of allotment or transfer of specified

security. The new section 80-IE is proposed to be inserted for providing fiscal

incentives to units located in North-Eastern States and Sikkim.

FM Alters FBT on ESOPs



Union finance minsiter P Chidambaram has altered the fringe benefit tax (FBT) on
employees stock option plans (ESOPs). Now FBT on ESOPs would be calculated at

the time of vesting options to employees and not at the time of allotment as

proposed in the Union Budget. However, FBT would have to be paid by employers,

but they can work out with the employees as per the mutual arrangement.

A $4.1 bn OPDS Market by 2011



The worldwide market for offshore product design services is expected to grow at
a compounded annual growth rate of 28% over the next five years, says an ARC

Advisory Group study. The study 'Offshore Product Design Services Worldwide

Outlook' predicts the market to be over $4.1 bn in 2011. In 2006, the size was

$1.2 bn. As per the study, the top five suppliers of offshore PDS are large

Indian IT companies.

Indian IT Industry Grows by 31% in 2006



The Indian IT/ITeS industry clocked Rs 198,477 crore of revenue in 2006, up by
31% over 2005. With equal drives from exports revenue and domestic IT spending,

the Indian IT industry has been able to keep up with the momentum it gained

since 2003. The industry is projected to grow at 18% CAGR for the next five

years time frame to cross an estimated Rs 458,228 crore of revenue in 2011. On

the domestic front, IT/ITeS spend has been estimated at Rs 68,411 crore in 2006,

a gain of 26% over 2005.

West Bengal Woos IT Companies



West Bengal is wooing IT companies, especially BPOs and LPOs to set-up
operations in the state. As an incentive measure, the state government, for the

first time in India, will be offering training subsidy for the companies. Debesh

Das, minister, IT, West Bengal says, "West Bengal Government will be

offering training subsidy up to Rs 20,000 per employee for the IT companies, who

establish a base in the state.

IT Exports Grow 38%



The country's IT exports have grown at 38.28% to touch Rs 158,500 crore during
2006-07, according to an estimate by the Electronic and Computer Software Export

Promotion Council (ESC). Sanjiv Narayan, Cairman, ESC says that computer

software and services were the key drivers with a 40% growth at Rs 105,000 crore

during the period as against Rs 75,000 crore in the same period last year. ITes

exports during 2006-07 registered a growth of 36.67%.

Software Exports Up in TN



Tamil Nadu (TN) software industry reported a 47% increase in exports in 2006-07
and is close to reaching a total employee base of two lakhs. Revenue nearly

doubled in the last two years to Rs 20,701 crore in 2006-07 from Rs 10,730 crore

in 2004-05.

IT/BPO at $100 bn by 2011



The Indian IT/BPO industry-domestic and export combine-is expected to
post a compounded annual growth rate of 18.2% over the next five years to clinch

over $100 bn in revenue by 2011. In terms of exports, the Indian IT/ITES

outsourcing market is expected to post a robust CAGR of over 17%.

PC Mkt to Grow by 22%



The personal computer market is set to grow by 22% in this financial year and
may record sales of 6.5 mn units. According to the Manufacturers' Association

for Information and Technology, strong macroeconomic conditions and buoyant

buying sentiments in the market led by demand from various industry verticals

will spur the growth.

Semicon Growth in Asia



The Asian semiconductor packaging and manufacturing markets looks set for robust
growth in the coming years, especially with semiconductor companies increasingly

outsourcing their manufacturing activities to low-cost Asian foundries.

A Watchdog for IT



Chandigarh will soon plan a watchdog for IT revolution sweeping the world, with
a first-of-its-kind Regional Cyber Security Research Center coming up in the

city. Taking steps ahead, Nasscom has signed an MoU with the UT Administration

for the RCSRC at Punjab Engineering College in Chandigarh.