In The IT/ITES sector, which is struggling with increasing costs and global uncertainty, keenly awaits relief in the forthcoming Budget.
The expiration of the STPI (Software Technology Parks of India) Act in 2011 has become the foremost challenge for all IT companies. The expiry has had an adverse impact on the SMEs and also the proposed extension of MAT to the hitherto tax- free Special Economic Zones (SEZs) will be key factors in this year's budget, says Kanaka Durga Bhavani Prasad S., Senior IT Manager, Fifth Avenue Sourcing Pvt Ltd.
Prasad said the government has to taken various initiatives towards e-governance such as the UID project etc. Now new initiatives/proposals from the government should include higher technology spending in education, retail and healthcare etc. Besides, dual levy of VAT and service tax on licensing of software must also be removed. Agreeing on this, SDPL Narayana, Assistant General Manager - IT, Neuland Laboratories Ltd says, The license cost of software has to come down since we are fully dependent on the software. He also asks for sandbox security tools, BI tools that have so many users must be reduced.
Other IT Managers like Sandeep Walia, Assistant General Manager-IT, HT Media Ltd feel that the Finance Minster must reduce VAT and Service Tax which is eating a large portion of our IT Budget. Also some sort of tax incentive for R&D, Innovations must come into place to help the IT industry to bring better products to compete with their global counterpart.
Besides more investment in the IT Infrastructure, better network connectivity, low cost of broadband/Internet will help in bridging the digital divide, feels Walia.
Other IT Managers have also asked for increase in budgetary spend to improve the quality of IT education which will help companies like Educomp, NIIT, Aptech.
Due to the impact of global recession it is most likely that some firms may see cut in IT budget/spending which may not have any direct impact on the delivery but in the long run see strategic long term projects to be slowed down, says, Somasekhara Rao Gonuguntla, IT Project Manager, TESCO. However, short ad-hoc projects may be cut or withdrawn, he adds.
This gives a golden opportunity for SMEs to move to the cloud and avail the rich benefits. Even though security may be a concern for some, still non-confidential employees, people management and some internal apps can be moved to the cloud platform, he concludes.
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