Finance Minister Pranab Mukherjee laid proposals for the IT/BPO industry in
the Union Budget 2010-11. Some of the the key highlights were:
- Introduction of Goods and Services Tax (GST) from April 2011
- Allocation of Rs 1,900 crore for the unique identification project
- Reduction of custom excise duty from 8% to 4% for LED lights
- Two more computerization centers for the administration of direct taxes
- Continued investment in special economic zones
- A citizen centric governance project to be launched in Pune, Kochi, and
Some major initiatives have been the complete liberalization of pricing and
payment of technology transfer fee, trademark, brand name, and royalty payments.
An interesting point here is that payments are now under the automated route. A
national clean energy fund for funding research and innovative projects in clean
energy technologies has also been proposed by the Finance Minister. An effluent
treatment plant at Tirupur is also on the anvil.
It has been decided to provide appropriate banking facilities to habitations
having population in excess of 2000 by March, 2012. It is also proposed to
extend insurance and other services to the targeted beneficiaries. With
appropriate technology back up, it is proposed to cover 60,000 habitations.
ITs Role in the Limelight
The FM has said that to achieve the rollout of GST by April 2011, the
indirect tax administrations at the center and the states need to revamp their
internal work processes based on the use of information technology. In this
context, Automation of Central Excise & Service Tax (ACES) has already been
rolled out throughout the country this year. This will impart greater
transparency in tax administration and improve the delivery of taxpayer
services. Similarly, a Mission Mode Project for computerization of commercial
taxes in states has been approved recently. With an outlay of Rs 1,133 crore of
which the centers share is Rs 800 crore, the project will lay the foundation
for the launch of GST.
Technology for Agriculture
The FM has proposed to address a few key areas that call for focused
attention. These include a strong supply chain for perishable farm produce to
reach consumption and processing centers promptly; infrastructure and technology
to convert such produce into value-added products; and infusion of technology to
augment agricultural production.
Digitalization is the Future
The FM has urged that the multi service operators need to invest in digital
headend equipment. He has proposed to provide project import status at a
concessional customs duty of 5% with full exemption from special additional duty
to the initial setting up of such projects.
IT and BPO Initiatives
The FM has proposed to ease the process of refund of accumulated credit to
exporters of services by making necessary changes in the definition of export of
services and procedures.