Thinking beyond IT

While IT czars are asking for sops to help revive the ailing industry, some experts believe IT will recover only when the rest of the manufacturing sector does

While IT czars are asking for sops to help revive the ailing industry, some experts believe IT will recover only when the rest of the manufacturing sector does

Even though the Prime Minister has asked the Finance Minister to come up with a budget for the aam aadmi, but still the IT industry hopes to get some benefits from the budget, which will be presented this Friday.

Saiprasad Rao, CEO of Digant Technologies, feels that it is not possible for the IT industry to recover on its own. IT will need support from the manufacturing sector especially the auto industry to improve. "The government should provide a stimulus to make the whole industry grow. IT cannot stand on its own because it depends on other industries," he says.

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Naresh Wadhwa, president and country manager (India and SAARC), Cisco, also echoes these thoughts. "A tax holiday incentive being introduced for the infrastructure sector at large, for power projects, and other large-scale development initiatives, would increase commitment from the industry leaders in these spaces to play more active roles," he says.

But this doesn't mean that the IT industry is not asking for anything. In a statement shared with the Press, MAIT's executive director Vinnie Mehta said, "The 4 per cent Special Additional Duty (SAD) should be abolished on all IT products and components. The SAD was introduced on imports to balance the impact of local taxes on domestic-manufactured products. With Competence in Software Technology (CST) being phased out, the SAD should, therefore, be abolished or at least be made at par with it."

u00a0Wadhwa also feels that the extension of the tax holiday beyond 2010 for at least three more years would enable the Indian IT sector to compete with other countries globally. "These incentives should especially help the small and medium businesses, a key growth sector that accounts for 40 per cent of the exports made from software technology parks."

u00a0Rao agrees with Wadhwa and says, "The fringe benefit tax is a major burden on IT/ITES and needs to be completely removed." With respect to the tax holiday, he feels that there should be a bit of give and take between the industry and the government.

"You cannot keep increasing the tax holiday indefinitely," he says.