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Personal Computer (PC) penetration is also on top of the agenda. The goal should
be to increase the reach of PCs from three per 1000 in 1998 to one per 50 with
universal access to the Internet by the year 2008. The existing six lakh-plus public
call offices in the country should be transformed into public tele-info centers offering
a variety of Internet and multimedia information services.
Mr. Mahajan would also do well to quickly ensure the passing of
the Information Technology Bill in Parliament for proliferation
of e-commerce in the country. Sops for entrepreneurs like a three
to five-year moratorium on taxes on e-commerce would help.
Overseas acquisitions should be allowed. The market capitalization
of the IT industry reached Rs. 1.05 lakh crore in September 1999
(19
percent of India’s total market capitalization).
Indian companies should be allowed to acquire companies overseas without prior
approvals. The government should remove the unfair Employee Stock Options tax
at the time of exercise, and enforce it during the time of sale. Taxation should be
in the form of long-term capital gains. Today, software can be imported through
the Internet.
No developing country charges tax on the import of software. The government
should immediately clarify that IT software and services are exempt from
withholding tax as mentioned in sections 9 and 195 of the Income Tax Act. Software
exporting companies have to fill up Softex form, and get certification. This serves
no purpose. The government should either scrap the Softex form or make it a self-
declaration form. Today, more and more software and e-commerce is developed
through virtual factories, and the concept of physical bonding no
more holds true in IT.The government should respect this and remove
physical bonding of equipment and premises in Software Technology
Parks and Export-Oriented Units.
With the advent of the Internet, e-commerce and IT-enabled services,
new laws are required for privacy, protection of databases, copyright
of databases as well as copyright infringement on the Net. The government should
itself become computerized. At least three percent of spending of all government
departments should be towards IT. With this step, e-governance will become a reality.
These steps will enable governments (like the one in Andhra Pradesh) to become
“
smart.” There is also a need to focus on the hardware segment. Amidst all the
hullabaloo on software, hardware often gets neglected. The need of the hour is to
Mr. Pramod Mahajan’s appointment
as the Minister for Information
Technology may provide a
non-conventional approach
to this sector
