Budget 2009 Elicits Mixed Reactions

DQC Bureau
New Update

Yes, the Finance Minister Pranab Mukherjee might have disappointed the Sensex,

but he has succeeded in winning the accolades of his fellow party men and the IT

industry. When the budget was being announced on June 6, the Sensex bull tanked

869 points. True the Budget, which aimed to build a successful post-election

platform and please the aam janta when there is a worldwide economic downturn,

was successful in doing so. The FM abolished the 10 percent income-tax surcharge

and raised the personal income-tax limit by at least Rs 10,000, which would

obviously pull in some extra money in the 'aam' pockets. While talking about the

industry people, they have actually welcomed the focus on 'inclusive growth and

equitable development' in the Union Budget.


The Unique ID project is the much needed and long overdue project, which can

dramatically change the way citizens interact with various government and

non-government institutions by bringing greater transparency and accountability.

Saket Kapur, General Secretary, PCAIT, Delhi commented that the Budget has

been entirely business-friendly. “Continuation of Exide Duty reduction, doing

away with the Fringe Benefit Tax (FBT), and confirmation of implementation of

Goods and Services Taxes (GST), which will be of a great boost for both print

and all media companies, is definitely a good move,” he opined.

Sharing his reactions to the Budget, Pawan Jajodia, President, Compass,

Kolkata said, “Demand was not there, hence nothing much was expected from this



However, there is also a section of people who are not very pleased with the

Union Budget. Prashant Ugemuge, President, VCMDWA, Nagpur said, “Government

should stop misleading people. Because on one hand they are saying that mobile

and PC prices have gone cheaper, on the other hand during the Maharashtra

Budget, the government increased VAT from four to 12 percent. It is us who face

the challenges, because we work on very thin margins.” He added that when the

government is planning to create Internet facilities in the villages, why can't

they give loan wavers to farmers to buy PCs for their children's education. “I

strongly feel that they should build free Internet cafes and give away PCs for

free or at cheap prices, which would also increase our business,” he added.

PN Prasad, President, Confed was of the opinion that there was nothing

IT-centric in the budget. “It will not be a catalyst for growth of the IT

industry. But status quo has been maintained,” he said.


MAIT has appreciated the thrust towards sustaining the national economic

growth and making it inclusive. It even expressed satisfaction over the thrust

given to infrastructure development, upliftment of the rural economy and launch

of several schemes towards promotion of education, especially among the socially

and economically backward. Vinnie Mehta, Executive Director, MAIT, said, “We

welcome the government's decision to maintain the current excise and custom duty

levels on IT products and components.”

The recent budget has even recognized the contribution of the IT-BPO industry

which accelerated India's economic progress and provided necessary measures to

boost the sector. “Many of the initiatives in this year's budget recognize the

role the IT BPO industry in creating substantial employment opportunities. The

industry will be keen to partner with the Government in expanding e-governance

initiatives including moder­nization of employment exchanges, the UIAD project,

and smart cards for healthcare services so as to achieve enhanced governance.

Increased capital outlays on the education and infrastructure sector will also

address growth challenges that the country has faced,” said Pramod Bhasin,

Chairman, Nasscom.

Ramkumar Subramanian, VP-Sales and Marketing, AMD India, said, “The policies

will help social sector spending that is bound to kick start the economy.

Measures like these will create liquidity, and bring money back into



Positives of the Budget were definitely the launch of Unique ID, reduction on

the duty cuts of LCD. “Higher financial inclusion will mean better opportunities

for IT by upgrading the rural exchange, allocation and dependence on IT for

success­fully implementing NREG, infrastructure development etc. Even more IITs

and NITs will lead to enhancing better skill sets which is very positive thing,”

said Girish Trivedi, Deputy Director-ICT Practice, Frost & Sullivan, South Asia

& Middle East Impact.

Sunil Jose, MD, Sybase India added, “The most welcome change is the complete

removal of the FBT. Its provisions were felt to be too burdensome and generated

a huge administrative liability on corporate.”

Naresh Wadhwa, President and Country Manager, Cisco, commented, “On the face

of it, the budget put forth by the government is positive and focuses on

inclusive development. Leveraging technology as a tool for accountability,

better governance, in business and administration is a step in the right

direction. The allocation of funds for e-governance investment schemes like the

unique identity number for every Indian and the formation of a Centralized

Processing Center (CPC) in Bengaluru to process electronically filed tax returns

will enable effective delivery of public services through public private



The refinancing of 60 percent of commercial bank loans for the PPP projects

in critical sectors like telecommunications, power generation, airports, ports,

roads and even in railways will definitely be very encouraging for software

vendors who predominantly provide IT solutions like business intelligence and

enterprise mobility in these segments.

Nandana Das