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f o u r
T
he IT industry’s faith in Finance Minister
Mr. Yashwant Sinha and IT Minister Mr. Pramod Mahajan has been vindicated.
For the third year running, the Finance Minister has come out with a Budget that
is oriented to the needs of this burgeoning industry.
The Finance Minister has been very kind to the software sector. He has allowed
on-site services to be exempted from income tax with retrospective effect. Almost
60
percent of India’s software exports are through on-site services. In the year
2000-01,
out of the projected software exports of US$ 6.24 billion, almost US$ 3.7
billon will be through on-site services. Also, the Finance Minister has allowed an
income tax holiday to those listed companies that get acquired. This has been a
kind of correction over last year’s Budget.
The stock markets too will find reason for cheer in the fact that the Finance Minister
has increased the FII investment cap from the erstwhile 40 percent. Also, the
dilution of the draconian laws of the ADR/GDR policy as well as the revolutionary
announcement of two-way fungibility are great news. If the market conditions in
the US improve, we can think of 100 Indian tech companies listing on American Stock
Exchanges in the next five years.
The emphasis on IT education too has been laudatory. Not only is the IIT
base in India going to be expanded with Rourkee joining the ranks of the august
IIT circle, the country’s RECs will also get upgraded. Meanwhile students across
the land will be incentivized to learn through easy educational loan schemes. Thanks
to some of these visionary steps, India can end up meeting its gargantuan skilled
manpower targets for the year ahead. The Finance Minister has secured the future
of many young Indians.
Also, there is some good news in the form of the status-quo being maintained.
No e-commerce tax has been imposed and neither have the export incentives
provided earlier been withdrawn.
The government has announced computerization of major departments like
customs, excise and passport by March 2002. This is good news and will inspire more
Sops for Software
Finance Minister Announces IT-Friendly Budget
The Hindustan Times March 1, 2001
