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It is being recommended that special schemes like the Vidyarthi Computer Scheme,
the School-College Computer Scheme or the Shikshak Computer Scheme be
announced wherein import duties, excise or sales tax will not be applicable on sale
of computer systems or software to students and educational institutions.
An expanding base of PCs will also provide a boost to Internet
penetration across India, which, in turn, will spur e-commerce
activity. A major thrust also needs to be given to e-commerce by the
Government this year and one of the ways it can be done is by ensuring
that no fresh taxes be levied on e-commerce transactions.
Action will need to be taken on yet another front. It is being stated that the
Government is looking at imposing a service tax on ISPs. This step in my opinion
will serve a death blow to the ISP market which is only now coming out of the
cold. VSNL has recently dropped its prices by over 70 percent, bringing some measure
of sanity into the market.A service tax on ISPs will reverse the trend and the end consumer
will once again have to bear the brunt of a price hike.
Knowledge workers are the other key priority today. Not only does the domestic
IT market require thousands of skilled knowledge workers, overseas markets are
also projecting a significant demand for trained Indian software and hardware talent.
Towards this end, the Government (under the 10th Five Year Plan), should envisage
an IIT (Indian Institute of Technology) in every State in the country. Also, an
allocation of at least Rs. 1,500 crore needs to be made during 2001-02 for partially
upgrading 43 RECs to the level of IITs and starting new IIITs during the year.
The hardware industry will also need to be incentivized this
year. Today, giant MNCs or even Indian companies are not
producing hardware in the country simply because they have
not been provided with a proper global level manufacturing
environment.The need of the hour is reliable power, excellent highways
that link the manufacturing facilities to ports and international airports
and hassle-free customs procedures.
Today, a significant demand of the software industry is that whatever concessions
have been given should not be taken away. Import duties on software that currently
stand at zero should remain so and not be raised.
Furthermore, some refinement will also have to be brought into Sections 10A/10B
of the Income Tax Act. The problem with the new sections is that they follow a
narrow definition of computer software, with the result that many income tax
An expanding base of
PCs will also provide a boost
to Internet penetration across
India, which, in turn, will spur
e-commerce activity
