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Manoj Chugh of EMC says, Overall, the budget looks to focus on enhancing
long term economic growth through stronger investments in social infrastructure.
In this direction, investment in education for not only spread but also
improvement of quality is encouraging. The setting up of additional IITs and a
fund for improving employability of our workforce are positive initiatives to
address the manpower needs of the technology sector.
According to Mittal It is knowledge that will drive success in the 21st
century. India has the opportunity to become a knowledge society. Following the
Prime Ministers announcement, an IIM at Shillong; three IISERs at Mohali, Pune
and Kolkata; and an IIIT at Kanchipuram have started functioning. The government
will establish one central university in each of the hitherto uncovered states.
We propose to make a beginning in 2008-09 by establishing sixteen central
universities. Besides, we propose to set up three IITs in Andhra Pradesh, Bihar
and Rajasthan; two IISERs at Bhopal and Tiruvananthapuram; and two Schools of
Planning and Architecture at Bhopal and Vijayawada. More institutes of higher
education, as promised by the Prime Minister, will be established during the
Eleventh Plan period.
Som Mittal also said that there is a compelling need to launch a world-class
skill development program, in mission mode, that will address the challenge of
imparting the skills required by a growing economy. Both the structure and the
leadership of the mission must be such that the program can be scaled up quickly
to cover the whole country. Hence, I propose to establish a non-profit
corporation and entrust the mission to that corporation. It is my intention to
garner about Rs 15,000 crore as capital from Governments, the public and private
sector, and bilateral and multilateral sources. I shall begin by putting Rs
1,000 crore as governments equity in the proposed non-profit corporation.
R Sivakumar, MD, Sales and Marketing, South Asia, Intel, says, We are
excited that the budget is focused on building the social infrastructure by
increasing broadband connectivity and strengthening the education system across
India. These measures are a step forward for transforming India into a knowledge
society.
The significantly higher allocation for education and health sector and
setting up of a new National Skill Development Mission offer a positive signal
to the knowledge-based industries to contribute to the economic development of
the country, says Kapil Dev Singh, country manager of IDC India.
The contribution of IT industry to the buoyant Indian economy did not
deserve excise enhancement on packaged software and imposition of service tax on
custom software, adds Singh.
The emphasis on building India into a knowledge society through a series of
proposalssetting up three new IITs, scholarships for innovation, R&D, and a
national knowledge network to connect universitiesare very welcome, says
Pradeep Gupta, chairman, CyberMedia and the past chairman of Pan-IIT Alumni
India.
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Attention Mr Chidambaram! |
| Respected Finance Minister Mr P
Chidambaram, Infanticide has been
looked down at as the most heinous crime in almost every mythology. In Greek
mythology Iliad, Medea is treated with utmost horror, contempt and ridicule
for her act of slaughtering her children. The same holds true of Indian
mythology where Kansa was painted as the vilest villain in the Mahabharata
for his numerous attempts at killing an infant Krishna. You might be
wondering why I am wasting your time with a mythological discourse on
infanticide. The reason, however, is straightforward. You have, either of
your own volition, or inadvertently on some misplaced advice of your
bureaucracy, just committed infanticide.
Yes, Mr Minister, what you are reading is
correct; you have indeed committed infanticide in your Union Budget plans
this year, the infant killed being the fledgling Indian domestic software
industry. This has been done through your proposal to impose a 12% excise
duty on packaged software sold over the counter.
It is really difficult to understand what led
you and your team to propose this excise duty. Mr Minister, the packaged
software market in India is virtually comatose thanks to the terminal
affliction called piracy, and with this one act of yours, you are ensuring
that the oxygen mask gets pulled off.
And all this for what? A meager contribution
of less than Rs 500 crore to the exchequer (yes, thats what would roughly
come out of this taxation), a mere nothing in your overall tax collection
drive. How to be penny wise and pound foolish has definitely discovered a
new proponent in you, Mr Chidambaram.
If you feel that Im sounding too
melodramatic, let me explain to you precisely the harms resulting from your
action. Packaged software taxation would seriously impact SMBs and even
hamper your governments cherished dream of bridging the digital divide. You
know how price sensitive Indian customers are and since this duty imposition
would increase packaged software prices by 10-12%, both consumers and
price-conscious SMBs are bound to rethink their software purchase decisions.
In a situation where prices are on a downward trend due to technology
advancement and increasing demand, this is not just a conservative step, but
a seriously retrograde one.
Especially at a time when SMBs were looking
at further government support in their bid for increasing automation, the
increase in prices of packaged software is a massive blow to their
automation dreams. Wonder why? Since even operating systems (read Windows)
come under the ambit of packaged software, this will even push up prices of
PCs with bundled software. And, subsequently, the PC penetration, especially
in the virgin sectors, would get stymied. Not to mention other essential
software like accounting packages, anti-virus, e-mail clients that too would
become exorbitant for these SMBs.
And all these combined would only give a
further fillip to software piracy, the potent malignancy that is already
ravaging the packaged software industry. Just when there was a feeling that
piracy is gradually coming down, at one stroke of a pen you have re-stoked
the flame that could bring down the entire sector. Increased software costs
will hurt the fight against piracy, which in turn will have an adverse
impact on the economy. Exaggeration, you would say? Savor these statistics
then: according to a study by IDC, a reduction in the software piracy by 10
points can have a significant impact on Indias economy and would add
115,847 jobs, contribute $5.9 bn to the GDP, $386 mn in taxes and $8.2 bn in
revenues to local vendors. Just see what you are missing out in an attempt
to gain Rs 500 crore in taxes.
You might say that this policy would drive a
shift toward open source environment, with that coming under the customized
software clause. However, it still begs the question that other than mission
critical apps, how many end consumers and SMBs are still technically
equipped to use Open Source. And finally, with democratic principles in
mind, shouldnt you leave the choice open to the end users only?
The purpose of writing this long letter was
to make you see reason, which I am sure would not be too difficult with an
academician like you. Every year, the Budget proposal witnesses a series of
roll backs, and so a complete revoking of this 12% excise duty would not be
unprecedented. While many of these are done after crippling strikes, violent
threats or political blackmail, be rest assured nothing of that sort would
happen with the packaged software industry. If not given the exemption, it
would only die a silent death. Im sure you would take care to see that does
not happen and the fledgling sector receives the life saving balm from your
hand in terms of complete revoking of the excise duty.
Waiting eagerly for you to take the necessary
step,
Yours Truly,
Rajneesh De
rajneeshd@cybermedia.co.in |
Suffering from Imbalance
On one side, the government has allocated fund to give impetus to
e-governance initiatives in education, healthcare and agriculture. And, on the
other side, the government has put a lot of burden on the IT industry by not
extending the STPI scheme beyond the year 2009, which may result in a number of
taxes and duties imposed on the IT industry. Employee retention would be another
challenge.
The need of the hour is to rethink and reconsider the issues that could
hamper the future growth of the IT industry and could affect adversely the
Indian economy and the common man.
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The imposition of the 12%
service tax on customized software and higher excise duty on packaged
software could slow down IT usage
in the domestic sector
Som Mittal, President, Nasscom |
Proper training and skill-sets
need to be imparted to our youth if India is to attain top rank in the
global digital economy
Krishan Dhawan, MD, Oracle India |
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| The budget 2008 has exceeded
expectations in terms of rural development, education and agriculture
Moon B Shin, MD, LG Electronics |
We are excited that the budget
is focused on building the social infrastructure by increasing broadband
connectivity and strengthening the education system
R Sivakumar, MD, Sales and Marketing,
South Asia, Intel |
Sandeep Sharma
sandeeps@cybermedia.co.in
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