'Budget Should Encourage Job Creation'
What’s your/IT industry’s expectation from the Union Budget this time round?
My key expectation from this budget would be measures that will help create jobs in the IT industry. We need to acknowledge that the last 2-3 quarters had been quite traumatic and there has been shrinkage in the jobs. We need a budget that will encourage job creation in this sector.
Given the current global recessionary scenario, how can the government help IT companies? What special measures would you recommend the government take?
The government can help the IT companies in two ways namely, capital formation and rewarding productive job creation. For capital formation, the government should use a mix of tax sops and credit-linked incentives to foster a good investment climate. For job creation, there must be an index of productive job created in urban and semi-urban; export and domestic; and credit given in terms of tax rebates.
Are you an export-oriented company? What are the measures you would suggest government take to enable you to improve competitiveness on this front?
Yes, we’re a predominantly an export-oriented company and 95% of our revenue is export revenues. I don’t think that government can impart competitiveness directly on this front. Indian IT exports are already very competitive. However, through partnerships with industry associations like NASSCOM and CII, government can assist in demand generation and in opening up of markets where the exposure of Indian IT sector is limited, say, for example, Latin America, Japan, etc.
Which other changes in regulation do you think can government make that will help the IT-ITeS industry?
Government should promote serious skill development in tier 2 and tier 3 towns, which are marketable in export markets. While there is no regulation required here, skill development impetus through various schemes from subsidies to tax cuts to credit benefits will help.
Do you think increased government spending on infrastructure, e-governance & IT can help the industry by spurring demand for IT software and hardware?
Yes, increased government spending in infrastructure, e-governance & IT will be very beneficial to the IT industry. IT has derived demand as government expenditure is increased. There will be enhanced exposure to IT systems requirement. Many governments in Europe, in East Asia and in the US are looking at this measure. Proactive approach from government would help.
For more responses to the upcoming interim budget, click here.
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