Trashing the Kelkar committee’s recommendations, Finance Minister Jaswant Singh did not disappoint either the middle class or the IT industry in the Union Budget 2003-2004. He has cut down duties on hardware and maintained exemption sops on software. Industry captains were all praise for Singh’s maiden budget

Kiran Karnik
President, NASSCOM
We are delighted that the government has accepted our recommendations with regard to full exemption of taxes on export profits, and also excluding demergers and amalgamations from the provisions of Section 10A/10B. This is a very positive development and will help the Indian IT and ITES industry to further enhance their global competitiveness and spur creation of new enterprises.

S Ramadorai
CEO, TCS
For the IT sector, the continuation of benefits under Section 10A/10B, as well as the proposal for continuation of the tax benefits even in the event of a change in the shareholding pattern are very welcome. The Finance Minister should be complimented for the overall proposals in the areas of biotechnology, R&D, as well as the reduction in tariffs in the IT and telecom sectors.

Arun Kumar
President and MD, Hughes Software systems
Initiatives such as the decision to exclude excise duty on pre-loaded software and reduce the Customs duty on capital goods for both the telecom and IT industry will boost the competitiveness of our industry and open up the domestic market. The Finance Minister’s endeavour to bring in greater accountability and investor confidence in the stock markets, and for creating an environment conducive for wealth generation via increased M&A activity is commendable.

Vinnie Mehta
President, MAIT
The removal of excise duty on pre-loaded software will positively impact prices of computers, they will fall by Rs 500-600. The continuation of income tax benefits for investments in R&D and new product development is a welcome move as this will give impetus to design activities, technology development and IPR creation in the industry. The excise duty on IT products continues to remain at 16 percent. MAIT had strongly recommended that this be brought down to 8 percent to counter the grey market, which today is over 50 percent of the total PC market. Also, had the reduction happened, PC price points could have dropped by about 5 percent, a very significant reduction for a price-sensitive market like India.

Ashank Desai
CMD, Mastek
The budget has been more or less good for the IT industry. The restoration of tax benefits under Section 10A/10B was required and was expected. However, the announcement on infrastructure, like spending on roads, modernisation of airports and sea ports are very important. This will help increase foreign investments in the country. The exemption of excise duty on pre-loaded software and the reduction of Customs duty on IT products is a measure in the right direction and will benefit consumers and the industry. The government’s decision to allow 100 percent investment overseas will also benefit IT companies in a big way.