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'A hat-trick IT Budget'

Dewang Mehta

I am extremely happy. This is like a dream Budget and a hat-trick IT Budget for Mr Yashwant Sinha. I would give him 9.1 out of 10 points. Watching Mr Sinha was like watching Zubin Mehta play a software philharmonic orchestra.

Mr Sinha has given a 100 per cent tax holiday to Internet and broadband service providers if they set up their services before March 31, 2003. This will bring in more investments and more proliferation of the Internet.

One of the most important elements has been the loan scheme for education for students. This will help a lot of youngsters to get loans and go in for higher education. The future of the software industry has been secured.

The real good news is that onsite services have been exempted from income tax from retrospective effect. Also, the tax holiday allowed for M&A for listed companies. I am confident the export target of 00-01 of US $ 6.24 billion will be met.

The FM has brought us wonderful news by increasing the FII cap on investment from the earlier 40% to 49 %. This will increase foreign investments and help software companies to grow. Also, he has diluted conditions on overseas investments for those software companies who have ADR/GDR.

For the ICE sector, a lot of concessions have been given for telecom, IT and entertainment. The FM has commented about the convergence bill. The telecom infrastructure sector will get a 5 year tax holiday if units are set up before March 31, 2003. The entertainment industry have been given concessions on financing, whereas a major fillip has been given to the software sector.

One good news is that the minister has said that by March 2002, major government departments will be computerised. This is good news, both for the industry and the government.

I expect a lot of policy decisions on hardware in the Exim policy. Definitely, we need a policy which builds up a hardware city with reliable power, good airport, ports and hassle free customs.

Overall, a great Budget from Mr Sinha. Now we have to lobby for more IITs, better physical and telecom infrastructure and at least two MBPS of bandwidth for every adult citizen of the country. I am confident that in the next 10 years, India will emerge as a great power to reckon with.

Dewang Mehta is president, Nasscom

Budget 2001

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