Features

What is the Industry Saying?

DQI Bureau

02 Mar 2002 00:00 IST

New Update

S Ramadorai, CEO, Tata Consultancy Services

The move to allow Indian companies to invest up to $100 million in a foreign country and the increase in the limit of overseas joint venture investment to 50% of net worth have happened at the right time. The 5% customs duty reduction on hardware inputs is also a boon. The concern areas in the Budget are the taxation initiatives. The Sec 88 deduction has been taken away and the introduction of taxation of dividend income will be a major negative factor for investing in equities.

Balu Doraisamy, MD, Compaq India

The budget lacks incentives that would help repeat the software success story in the hardware sector. With none of the expected benefits of this budget coming through, an increase in memory prices in the last three months and the falling rupee prices vis-Ã -vis the dollar, we expect the price of IT products to increase in the coming days. The impact of reduction in special excise duty of 16% on IT products can also be judged only after the list of items is announced.

	Ganesh Natarajan, deputy chairman and MD, Zensar Technologies
	This one is quite a damp squib for the Indian software sector. It is disturbing that the 10 A 10 B benefits have been partly withdrawn. Though the impact is marginal, not more than 3.6 %, the trend is disturbing. The tax on 10 % today may become tax on 50 % next year. Proactive measures to boost government spending on IT, encourage IT enabled services and e-commerce have also not been realized.

Ravi Aggarwal, VP, business customer sales organization, HP India
Growth in the IT hardware industry is closely linked with additional investments in physical infrastructure, education and the setting up of new industries. As the budget is extremely bullish in taking positive steps in the above areas, this would result in growth in the IT industry.

	Ajai Chowdhry, Chairman and CEO, HCL Infosystems
	The extension of the zero duty regime from 2003 to 2005 is pro manufacturing and a welcome step. The additional depreciation in plant machinery is also a good step as PCs are also bought in certain industries as plant machinery. With the overseas investment limit being raised from $50 million to $100 million, acquisition will now be easier.

Avtar Saini, director, South Asia-Pacific, Intel
The Government of India’s proposal to enhance investment in infrastructure and education is encouraging. This will have a pronounced effect on the overall economy in the long run.

	Abraham Thomas, MD, IBM India
	The announcement of reduction in hardware import duty and the introduction of income tax on software export profit though significant, would impact businesses marginally.

Raj Saraf, CMD, Zenith Computers
Reduction in duties on hardware components brings some relief. This will result in a reduction in the prices of hardware products by around 3-5%. On the whole, the budget this year is unlikely to boost the much needed growth rates within the IT sector.

	Vinnie Mehta, director, MAIT
	The prices of IT products are not expected to come down as most components of the IT products especially PCs and peripherals are already in the range of 0-5 per cent. Further, there being no reduction in the excise duty, the prices of IT products will remain unchanged.

Kiran Karnik, Nasscom
We welcome the lowering of customs duties on components and capital equipment for computer hardware. However, inconsistencies in the tax regime could hamper India’s competitiveness in global markets.

	N Lakshmi Narayanan, President and COO, Cognizant Technology Solutions
	Barring the 10% reduction in customs duty for setting up earth stations and the mild concession for hardware and IT products, there is nothing noteworthy for the IT sector.

Sujay Chohan, GVP and country director, research and advisory, Gartner India
The sops/protection given to the hardware industry will do little or nothing to PC prices. It’s also doubtful whether the reduction in customs duty will be passed on to the consumer.

	Pramod Khera, managing direcor, Aptech Training
	The hardware industry’s demands have been met to some extent, with the reduction of customs duty to 0% coming into force only in 2005. However, there are no specific measures to boost domestic demand for IT, which is a disappointment.

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