The Union Budget 2009-10

The Union budget 2009 seems to be a well balanced one with emphasis on education, health and employment. The Government has shown foresight by provisioning to keep the banks and insurance under public sector control under the present recessionary scenario.

For the IT sector ‘ this is a good budget, where the Government has taken decisive steps by enabling policies like the extension of the STPI scheme by another year however a longer extension would have definitely helped the industry. Â Removal of Tax anomalies for SEZ units and abolition of the Fringe Benefit Tax (FBT) brings respite which was mostly affecting the IT and ITeS industry. With the tax gone, the Employee Stock Options will get attractive again and will help us in attracting and retaining talent. The introduction of 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. The proposal to create an alternative dispute resolution mechanism within the Income Tax Department for the resolution of transfer pricing disputes will reduce the impact of errors in determining transfer price in international transactions. These initiatives reflect a new thinking at a policy level and this renewed approach will help in creation of a level playing field for Indian firms competing against aggressive global competition. Â The exemption of packaged softwares from excise duty could make the prices of these softwares cheaper and affordable for smaller IT firms.

The emphasis on the social sector development is in line with the government’s mantra of ‘inclusive growth’,and special emphasis on education is a welcome step. The provision for the Scheme ‘Mission in Education through ICT’ has been substantially increased to Rs. 900 crore and will create a better talent flow in the years to come. The speed of progress `in talent assessment, training needs analysis for a range of services sectors including IT and the development of a new technology architecture which would support learner centric education by connecting campuses, content specialists and the student community will now be possible by the up-gradation for Polytechnics under the Skill Development Mission for which allocations have also been increased. The enhancement of overall Plan Budget for higher education by Rs. 2000 crore over Interim Budget Estimates and allocation of Rs. 2,113 crore for IITs and NITs, which includes a provision of Rs. 450 crore for new IITs and NITs is just one of many initiatives our country needs ‘ especially in Jammu and Kashmir, North East, and other states to reduce the digital divide that grows deeper between the have and have nots in the country. New Projects such as modernization of the Employment Exchanges and First Unique Identification Card for citizens to be launched in the years ahead also focuses on efficiency of delivery of government programmes and is an important step in ushering greater transparency and accountability in the public decision-making process.

So while India Inc was expecting to see more action on he focus on inclusive growth and the importance given to Education, e Governance and rural development are all steps in the right direction and in the medium term will spur consumption and investment all over the country.

Published on : 7th July 2009 07:43:29
Last modified on : 23rd March 2010 07:47:31

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