India's rapidly-growing IT industry wants the Government to unveil a clear roadmap for boosting the creaky infrastructure in the Budget to help the sector achieve sustainable and robust growth in the years ahead.
Software development and services companies, which earn billions of dollars in export revenues, hope the annual fiscal package would also unveil guidelines for enhancing the meagre Government investments on technology usages.
Finance Minister P Chidambaram will present the Budget for the fiscal year 2005-06 in Parliament on February 28.
"Infrastructure tops the list of IT industry's expectations from the budget," said president of the National Association of Software and Service Companies (Nasscom), Kiran Karnik.
"We need massive investments to boost infrastructure for the IT industry in the country. This is very critical for the growth to happen on a sustainable basis," Karnik told IANS.
The pace of investments in urban infrastructure, especially mass transit system, is proving to be a major roadblock to growth in economic activity in many Indian cities, says a Nasscom survey report.
While the Central and state governments are laying special emphasis on improving the overall quality of basic infrastructure in the country, companies might face some hurdles in the short run, it adds.
{{/usCountry}}While the Central and state governments are laying special emphasis on improving the overall quality of basic infrastructure in the country, companies might face some hurdles in the short run, it adds.
{{/usCountry}}Karnik also urged the Government to increase expenditures on the usage of IT and IT-enabled services, including e-governance, to give a boost to the growth of the industry.
"Just allocating money is not enough. It should also be spent wisely. If, as an indication of the Government's intent, allocation for the IT services usage is enhanced, we will certainly welcome the move," he added.
Admitting that all the budgets in the past few years have been favourable to the IT industry in terms of taxation structure, the sector representatives hope the Budget would not alter the existing tax norms.
"There has to be some kind of stable regime in taxation matters. The Government should define the policies with a long-term view," said chairman of one of India's leading mid-size software services majors Mastek Group Ashank Desai.
"Stability in the fiscal policies of the Government would not only boost the sentiment of domestic companies but also result in sharply higher overseas investments into the country," he added.
Executive chairman of Xansa India and chairman of Indian Venture Capital Association Saurabh Srivastava said the Budget should focus on boosting economic growth as this, in turn, would result in increased IT spending.
"The Budget should give a clear signal about the reforms drive, foreign direct investments and infrastructure development. Overall, it should be growth oriented," Srivastava added.
In the hardware sector, the industry leaders hope the Budget would introduce a uniform eight per cent excise duty on all IT products.
In January 2004, the excise duty was brought down to eight per cent from 16 per cent only for computers and subsequently reduced to nil in July 2004.
"Inputs and other peripherals still remain at 16 percent. This anomaly needs to be rectified," said executive director of the Manufacturers Association for Information Technology (MAIT) Vinnie Mehta.
"Under the current cost structures, it is only the reduction in excise duty on inputs that can help improve IT penetration through reduced prices for a price sensitive market like India, especially the home and the education sector."