Mr. Narsimha Rao, President, ITsAP

From the IT industry we are expecting the government to make the following policy changes.

a) We need the government to provide tax incentives either by continuation of the benefits existing under 10A/10B for an additional 10 years or come out with an alternative scheme which can provide for tax incentives under the STPI scheme in line with what IT companies get when in a SEZ. SMEs are the hardest hit with the impending sun-setting of 10A/10B benefits in 2011 and we need government to address this.

b) Related to the above, today movement of businesses from STPI to SEZs or between SEZs is extremely restrictive. This is making companies uncompetitive by making them less efficient. Government should allow for greater flexibility for the IT industry in moving Business and resources between the SEZs and from other entities.

c) The Government has a huge pent-up demand to implement Technology-based solutions for its services. We need government to announce a specific and time-bound plan for implementing Technology for Governance and citizen services.

d) Human resource is going to be most critical factor for success of the IT industry in specific and for the country in general. We need government to continue large-scale investments in the field of Education and focus on creating better infrastructure and large-scale faculty enablement programs.

e) We need Government to continue to invest in infrastructure building across the country and

f) Last but not the least we need Government to invest in the security infrastructure in the country and ensure we have incident free, peaceful and secure societies.

The biggest need for the IT industry today centers around the extension of Tax benefits to Software units under STPIs. We are on the verge of a strong recovery for the industry with expected growth rates of 10-15% next year and the budget can really take the momentum forward with a positive announcement on this front.

Likewise, the restrictions on movement of business by IT companies between SEZs and with other STPI units are posing severe challenges and limitations thereby reducing the competitive advantage the companies have. While the SEZ restrictions are made across the board, we need specific provisions for free movement of business and resources in the IT industry.

The Government has a huge pent-up demand to implement Technology-based solutions for its services. We need government to announce a specific and time-bound plan for implementation of Technology for Governance and citizen services.

Some of the challenges facing the country today continue to be around unemployment, social disparities, lower levels of literacy leading to lower quality of the human resources. The challenge for the government would be to ensure we spend adequate amounts in the high priority areas such as Infrastructure, Social support and education without necessarily running up high fiscal deficits and without raising the tax burden on any 1 segment. The solution to some of these lies in ensuring we take measures to accelerate our growth rates further to 9 or 10% and to encourage businesses to thrive. We need job creation at a faster pace and that requires us to take steps to encourage investments to come in.

Budgets are normally about sentiment and statement of intent more than specific 1 or 2 policies. I believe we are at the beginning of the 2nd round of growth in the country and it’s important the budget creates a strong positive sentiment. This is a great opportunity for the Government to bring in the long pending reforms on various fronts and I wish to see government kick start these reforms in a big-bang manner. The 2nd and 3rd budget for any government are their best opportunity to bring in the big changes.

Mr. Narsimha Rao
President
ITsAP
(Information Technology & Services Industry Association of Andhra Pradesh - Formerly HYSEA)

Profile - ITsAP
ITsAP is a registered apex body with more than 300 members representing software industry in AP under the Andhra Pradesh Societies Registration Act. ITsAP aims to place Andhra Pradesh as the leading intellectual capital of the world, by nurturing entrepreneurship, research and innovation, to achieve global excellence in IT products and services. ITsAP also works for the growth of IT industry via participations in overseas and domestic promotional drives and close liaison with visiting delegations overseas.