Interim budget evokes mixed response

Mumbai: Though the interim budget presented by Union Minister Pranab Mukherjee was on the expected lines, keeping in mind the forthcoming general elections, India Inc, struggling hard to cope with the slowdown had some expectations.

Prior to the budget presentation the IT industry was pointing at the need for extensions of Software Technology Parks of India (STPI), Export Oriented Units (EOU) schemes, Employee Stock Ownership Plans (ESOPs) and some more Standard Operating Procedures (SOPs) with tax benefits.

However, the interim budget was far from those expectations and failed to uplift the business sentiments and positivity in the market, particularly the IT industry.

Though nobody did expect any magic they had all expected some relief in the backdrop of the slowdown.

Some industry experts say that there's a clear shade of politics with the upcoming general polls, slated in two months' times from now. But, at the same time an interim budget has certain limitations, feels the industry.

Nasscom, in its statement said that it did not expect any major announcement, as the present one was a vote on account budget. The voice of the Indian IT industry, however, felt that it was heartening to see the benefits that the Government is seeing in adopting IT, through projects like 'Arrow'.

"To drive economic activity, the Government needs to expedite spending of these allocated funds particularly for IT projects, to stimulate the domestic market," the statement said.

But nothing of that sort is seen in the budget, feel some who consider the budget to be dull.

"We had expected the STPI/EOU incentives to be extended for another three to five years as exports had declined in the recent times by about 10 percent primarily due to decreased global demand and rupee depreciation," said Amit Maheshwari, CEO and MD, Softlink.

"There was nothing significant for any sector. Government didn't have much of a choice as they did what they could do best. It was believed to be an interim budget and so it has turned out to be an interim budget, now we will have to wait for the new government and the final budget," Maheshwari hopes.

Even Vipul Jain, CEO and MD, Kale Consultants had expectations on the same lines. "Nothing major happened as it's an interim budget keeping in view the polls ahead. It's a big disappointment as the government could have taken a few bold steps in continuations of the earlier economic initiatives," Jain said.

"It's an opportunity lost by government. The opportunity to send a positive message across the sectors. Now, it will depend on the new government to do so and hope it does it," he added.

Karthik Shekhar, General Secretary of UNITES Professionals, the trade union of IT employees, said the union is happy as well as disappointed with the interim budget.

"We are happy, as there is focus on continuing the policy started in the last four years so their will some employment generation, and as the government has promised more computerization so SME and Domestic Market, there is an opportunity for IT/ITES companies," said Shekhar.

However, he said the union is unhappy because the employees have not got any new tax benefits. And also the laid of employees have not been mentioned any where, he pointed out.

Following the budget announcement, the Bombay Stock Exchange sensex lost over 300 points and ended at 9305 points.