Wednesday, March 5, 2008

Union Budget: step mom like behaviour towards Indian IT firms and BPOs

After a money shower on sports, agriculture and mass relaxation in tax we have perhaps overlook the darker side of this union budget. Recently in a news program in CNN IBN 7, it is revealed that many IT firms of India are planning to move Singapore, Malaysia to cut short the spending. After this budget, the professional tax for Indian IT firms is 22-23% whereas in Malaysia its 15-18%, the land property tax is also very high in comparison to Malaysia and Singapore. This is to mention that a lion part of Indian revenue is generated by Software firms and BPOs. Now after this recent development in Union Budget suggests that there will be no exemption in SEZs/SEMs after 2009, so mid-level IT companies are moving to countries like Malaysia, Philippines.

Here, at this point, our finance ministry should ponder over one thing that is this a positive move to impose high taxes on IT companies as it is the most revenue generating industry and also highest job generating industry as well. If this decision persist for a long then again we will see brain drain like early ‘80s when most of our intelligence fled to USA.


Antara said...

Your post is undoubtedly pretty informative.
But I have a problem with its title
"Step mom like behavior".
Step moms aren't always as bad as they are projected in fairy tales :)

Rupsa said...

After a span of years India is again riding the path to attain some of it's past glory. We do not want to loose our country's assets because of some error on the part of our ministry. I hope our respected finance minister reads your post.

Debashis Roy said...

Hi live dreamer,

It's truly a matter of high concern. While we see the statements of the Ministers regarding their interest towards IT development in India, we really jump on our toes. But on the other hand, the new budget has reacted in a negative way. In spite of the continuous effort of business legends to expand the Indian market, the growth becomes standstill.

dreamer said...

Thanks Antara, Rupsa, Debashis for your valuable comments...this new policy will put us in a big problem...this recent union budget clearly suggests that FM is aiming for next election whereas IT companies have to compensate for that most. Why So?!

Admilson said...

It’s very sad news from the view point of the student who are taking preparations for the IT firms and for our country's economy also. This year India has not been able to increase its growth rate of economy. Our FM has promised an economic growth rate of 9-10% by 2009. But if IT companies decide to shift their branches to other countries, then how we will be able to increase the growth rate? We should encourage the IT industry as we are getting huge projects from the other countries.

Somtirtha said...

IT industries are in booming state in India still FM's negative act(at least people of IT are thinking so) appears really odd!! Right post at the very right time,man!!