Budget Will Help Domestic IT Cos: Ganesh Natarajan
Responding to the Union Budget 2009-10 proposals, industry veteran Ganesh Natatarajan, CEO and vice chairman of Zensar Technologies and chairman of IT/ITeS wing of CII, said that removal of tax anomalies for SEZ units and abolition of FBT brings respite to the industry, and employee stock ownership plans (ESOPs) will become lucrative.
As the Union Budget comes with a focus on inclusive growth, the IT/ITeS industry has some reasons to cheer. CXOtoday spoke with Natatarajan who is also a member of the chairman s council, Nasscom. He said that the budget is a well balanced for the IT sector, where the government has taken some decisive steps. However he said that a longer extension of STPI scheme would have definitely helped the industry.
The removal of Tax anomalies for SEZ units and abolition of the Fringe Benefit Tax (FBT) brings respite which was mostly affecting the IT/ITeS industry. As the finance ministry removes tax, the Employee Stock Options (ESO) will get attractive again and will help us in attracting and retaining talent. However, minimum alternate tax is something which is still of concern for us in the industry, he said. According to Natarajan, the initiatives reflect a new thinking at a policy level and this renewed approach will help Indian firms competing against aggressive global competition.
Natarajan said that the extension of deductions in respect of export profits under Section 10A/B of the Income Tax Act by one more year for FY 2010-11 is good. The exemption of packaged software from excise duty could make the price of software cheaper and affordable for smaller IT firms, he said. While India Inc. was expecting to see more action on corporate tax, customs and excise duty structures, the focus on inclusive growth and the importance given to education, e-governance and rural development are all steps in the right direction."
The introduction of the dispute resolution cell and proposed safe harbour rules should address the issue of unwanted litigation in India, which has been one of the biggest concerns of Indian and foreign taxpayers- he said. Natarajan also said that the industry will be keen to partner with the government at every possible juncture to address growth challenges that the country has faced in the recent past.
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