Indian CXOs Welcome Budget 2005-06

by Julia Fernandes    Feb 28, 2005

The Union Budget 2005-06 announced today has been positively welcomed by Indian CXOs, with reactions ranging from progressive, balanced and good. CXOtoday reports a handful of such comments from a cross section of industry leaders.

Says Arun Kumar, president and Managing Director, Flextronics Software Systems Limited (formerly known as Hughes Software Systems), “It is a progressive budget aimed at balanced growth across various sectors. The thrust on infrastructure will not only address the developmental needs of the country but also send the right signals to foreign investors.”

“The focus on SMEs in IT, pharma and manufacturing is a good sign. Recognizing IT’s contribution as a job creator is a positive endorsement of the achievements of this sector and hopefully, the government will address some of the areas that might constrain growth in this sector.”

Endorsing Kumar’s views is Rangu Salgame, president, Cisco Systems (India & SAARC) said, “This is a progressive and balanced budget from the economic perspective. The announcement regarding implementation of VAT across all states from April 1, 2005 is a welcome step towards simplifying the tax regime in India.”

“The government’s decision to increase teledensity across all villages by 2007 will positively impact connectivity, helping rural Indians to be a part of the digital revolution. The revision in duties, particularly the exemption of customs duties on ITA bound items is likely to be welcomed by CIOs of Indian enterprises, which are aggressively increasing their IT budgets this year to make them globally competitive,” added Salgame.

According to Ravi Sharma, president- Alcatel, South Asia, “This is a very welcome budget from the Government, in the right direction in making India a manufacturing destination for Telecom equipments. This will surely make India a dominant player in the world for both manufacturing and services for the Telecom sector.”

“In addition, the measures aimed at augmenting growth in sectors such as SMBs, textile and manufacturing will have a positive effect on the overall economic development of the nation,” added Sharma.

“Budget 2005 has all the ingredients for growing the domestic IT market five times faster than the percentage of global IT spending. The government’s focus on comprehensive development of infrastructure and rationalization of customs duties is a positive step to stimulate domestic demand,” commented Manoj Chugh, president, India & SAARC, EMC Corporation.

“The spotlight on supporting SMEs and increased skills development will be strong growth drivers for the Indian economy. Investment in creating a robust information infrastructure to monitor and execute on the social projects announced will help ensure that the benefits of government spending accrue to the common man,” affirmed Chugh.

Commenting on the budget announcements, M. K. Mittal, deputy general manager-information technology, IFCI Ltd - a non-banking financial institution, said “Reduction of corporate Income Tax at 30% is definitely welcome. After a very long time we have got a positive budget.”

Agrees Javed Tapia, director, Red Hat India, “Reduction in corporate tax is a clear indication of the confidence that the Finance Minister has in India Inc. Reasonable rates will definitely lead to higher resource mobilization and compliance.”

Ashok Adhikary, associate director- systems, Kvaerner Powergas India Ltd., who rated it as a highly positive budget said, “The focus on rural connectivity, creation of large number of IT jobs and emphasis on infrastructure investment including IT is highly positive.”

“Moreover, higher target for IT enabled services, reduction in hardware custom duty will boost the economy and create level playing field for India in the global market place. Further, budgetary support for Govt of India s initiative for creation of a Knowledge Commission is a great positive development,” asserted Adhikary.

Meanwhile, Sanjeev Sharma, Managing Director, Nokia India believes that the budget clearly shows the government’s commitment towards the reform process and long term vision for the telecom sector. Says Sharma, “We appreciate the consistent policy direction shown by this government and are confident that this reasonable tariff structure will help us keep the grey market under check and increase handset sales through the legal channel.”

“The decision to remove mobile phones from the one-in-six criteria for filing income tax returns and increasing the government’s contribution to the USO fund are also welcome developments that will give a boost to both mobile phone adoption and rural telephony,” affirmed Sharma.

As a note of caution he said, “However, for this budget to have its desired impact, the government will have to ensure that its guidelines are duly executed and enforced.”