BANGALORE: Though disappointed over the Union Government’s silence on the extension of tax breaks under the Software Technology Parks of India (STPI) scheme , the IT industry is cheering for the Union budget 2010 presented by the Finance Minister Pranab Mukherjee on Friday.
The main reasons for the IT industry giving the thumbs up to the Budget is the government’s positive outlook on Special E c o n o m i c Zones (SEZs) and other Budget announcements which the industry feels will help it grow faster.
IT Majors like Wipro and Infosys were all praises for the government’s move towards fiscal consolidation and the calibrated stimulus withdrawals.
“The Union Finance Minister has presented a Budget that has been focused on fiscal consolidation.
The projected reduction in the Budget deficit to 5.5 per cent - down from 6.8 per cent is a positive development as the country strengthens its growth after the recovery from the global recession,” said Kris Gopalakrishnan, CEO and MD, Infosys Technologies.
Suresh Senapaty, Executive Director and CFO, Wipro, concurred with Gopalakrishnan.
“The Finance Minister needs to be congratulated on presenting a growth oriented and progressive Budget… Even as he withdrew the stimulus incentives in a calibrated manner, he ensured that as an economy we were investing in the right areas such as infrastructure, social sector and renewable energy,” he said.
The industry is not too worried that there is no word in the Budget about the extension of tax breaks under STPI beyond March 2011.
Industry bosses feel that there is still plenty of time left to negotiate the issue with the government.
“The tax benefits under the STPI Scheme are available till next year. We still have a year to work on it,” Nasscom President Som Mittal said.
While Nasscom welcomed the governments move to remove the anomaly in Section 10AA of the SEZ Act, enhanced deduction on R and D investment, reduction of personal income tax and simplification of policies, the software body expressed concerns over increase in MAT (from 15 pc- 18 pc).
Source : expressbuzz.com