Budget buzz

• Clarity on regulatory delays, legal hurdles and the growing maze of international and domestic tax rules.

• For the smaller fry in IT and telecom, a breather in the form of tax breaks and special economic zones.

• Everyone wants PC penetration to leapfrog from today’s sleepy 14% to 40%-50%, but will the FM unveil a plan?

BUDGET RECAP 2004

Nothing spectacular happened to hardware, BPO or software players. Mobile handset makers and universal access providers got some exemptions and excise duty on PCs was removed. The last date to qualify for exemption under Section 80 IA was extended to March 31, 2005, and the zero-duty regime for hardware was set for this July.

WHAT I DON’TEXPECT IN BUDGET 2005

Much has already been done to encourage investment in the information highway. Now, I believe, the focus ought to be on ensuring that people are able to utilise this infrastructure.
–Manoj Chugh, President, India & Saarc, EMC India

The industry will continue to grow at 25%-30% even if the government does nothing. But our numbers are so small that I want to ask: Will the government enable higher consumption of IT — like it did in telecom — so that investors sit up and take notice?-
Vinnie Mehta,Executive Director, MAIT

We have many issues with international and domestic tax issues. But till date, the industry has grown well, and I don’t expect growth will falter the next year either.
-Sangeeta Gupta, V-P, Nasscom

PERFORMANCE SNAPSHOT

Over March-December 2004, profit margins grew 32% and profit after tax margins 19% in the software sector. The computer hardware industry size grew 44.2% to Rs 230 crore over April-November 2004. The profit after tax (PAT) of telecom players showed a 8.70% growth.