Saturday, March 2, 2013 Financial Chronicle and Business line
The interesting feature of this year’s budget was the lack of hype and hoopla that preceded it. The Rail Budget earlier and the grim economic survey had foretold that there was no chance of a miracle. And there wasn’t! This is a budget that did little to benefit most sections of the industry, but then it didn’t harm anyone either.
If there is one thing we could not have expected from this budget or any budget to do, it is to provide a panacea for all the ills that plague the economy today. This has been done in the budget and for that we should be thankful.
From IT sector, there were three expectations, from the budget and beyond. With global economies continuing to be slow and competitors nipping at the heels of all software exporters, clear continuation of the SEZ benefits and providing incentives for tier-II and III cities and product entrepreneurs would help in accelerating exports. The budget has been silent on this and we hope that future policy announcements will ensure this happens and provides a fillip to new entrepreneurs and new destinations.
The second expectation was confidence-building measures to ensure that customers continue to give India the lion’s share of their offshore allocations, whether it is through their own global in-house centres or enhanced work with third party solution providers. Transfer pricing clarifications and the implementation of the safe harbour provisions enacted in 2009 would ensure that both the Indian industry and multinationals operating grow their operations.
The third and possible the most future focused announcement expected was a boost for young entrepreneurs not just in IT, but in every sector of the economy. Entrepreneurship needs enabling policies and a vibrant ecosystem to spread and grow. This budget has done a lot in this area from the admissibility of contributions to university technology incubators as CSR to the support by the national innovation funds to entrepreneurship ideas focused on inclusive India to the “pass through” support provided to angel investors by Sebi.
“The greatest danger in times of turbulence is not the turbulence; it is to act with yesterday’s logic” — Peter Drucker
These words have been heeded by the FM in his budget. Overall the budget does not move the needle much, but at least there seems to be a new resolve to right the wrongs of the past and take the country forward. At a time when a new path forward was necessary, the FM seems resolved to find it. It will now have to be seen whether the implementation and governance mechanisms will be put in place to deliver on the numbers that the budget promises.
Dr Ganesh Natarajan is Vice Chairman & CEO of Zensar and Chairman of the National Knowledge Committee of CII.