Indian IT polite PR on the budget
By Ria Basu

Indian Finance Minister Pranab Mukherjee has just presented his budget.  The fundamentals are strong in India and whatever the budget the country will keep a steady 6.5 – 7 percent growth even as our major trading partners are suffering recession. As the Congress led Government had a clear mandate, the private sector (including tech) were expecting more from the budget.

The private sector and the share market were expecting divestment (or at least public/private partnership) of some Public Sector Units.  More and better infrastructure to support our booming IT, BPO and KPO sectors.  Tax exemption of at least 2 years for our software parks.  The tech tycoons were not happy with the fiscal deficit of 6.8 percent.

The only real win for the Indian tech sector was the abolition of FBT. Foreign tech firms have got some tax concessions and a new forum to resolve ‘tax issues’.

But no IT, BPO and KPO boss would like to be publicly seen to cross the Indian Government.  We are a democratic country but do not practice the same freedom of speech seen in US and UK.

So the charade continued.  Every year, an Indian Finance Minister presents a budget.  And our tech bosses, with help from their skilled PR Departments, churns out polite words for the political bosses. 

TOI interviewed a few Indian IT and BPO bosses and here is a sample of what they said:

“
Overall this budget is good for the IT sector with certain facets that are encouraging for the sector. However, the ICT Industry was looking for more support from the Government. We had recommended 100 per cent depreciation on financing of IT equipments, which was not included. On the taxation aspect, the excise/CVD exemption is unclear as it was not stated whether VAT is included in this or not. 
- Ajai Chowdhry, CEO and Chairman, HCL Infosystems Ltd

The extension is a good move at time when the industry is facing pricing pressure and volumes are down. The government has also scrapped the FBT, which was mostly affecting the IT and ITeS industry. With the tax gone, the Employee Stock Options will get attractive.
- GENPACT CEO Pramod Bhasin

I welcome reaffirmation of introduction of GST, continuation of IT exemption for STPI and other units for one more year, even though the industry was keen to get a three year extension. BCIC also welcomed various measures pronounced in the area of infrastructure.
-  Bangalore Chamber of Commerce and Industry (BCIC) President K R Girish
“

Respected Narayana Murthy who could be seen on Times TV praising the budget had harsher words in print.  Mr. Murthy wanted a roadmap to reduce the fiscal deficit to 3 percent.  He also wanted more measures to ensure more foreign investment.

Microsoft India has a cryptic one liner: “A welcome step announced is the proposal to set a cell within the Income Tax Department for facilitating the resolution of tax disputes within a reasonable time frame."   For those not following Microsoft in India, in mid-2008, the Commissioner of Income Tax (Appeals) had asked a Microsoft India subsidiary to pay Rs. 700 crore as unpaid tax to the Indian Government.  Microsoft India had been running from pillar to post to get this resolved.

Perhaps in a few more years time, we will see our highly regarded IT and BPO bosses say what they really feel.  Would it not be refreshing to see the Wipro CEO come on CNN/IBN and saying: “We should be okay.  But it would have no much better if the Government had taken concrete measures to encourage foreign investment in India.  I also urge the Govt of India to sell Air India”.

Till the CEO’s speak their mind, this charade of polite opinions will continue.  After all, no one wants to antagonize the powerful Pranab Mukherjee.