Union Budget detrimental for IT growth & exports: Experts

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Trivandrum: Eminent industry experts and economists gave a clarion call to the Government to spruce up growth through increased public investment, amidst a general consensus that the Union Budget 2013 has contributed little to tackling the country’s three key problems of growth, inflation and current economic deficit. The Budget will make IT more expensive and there was nothing in the Budget to promote exports or the growth of the IT industry.

These were some of the key takeaways at a panel discussion held in Thiruvananthapuram, as part of a session jointly organised by KPMG in India, Asian School of Business (ASB) and CII Kerala to discuss and deliberate the impact of the Budget.

Opening the discussions, Prof. Balakrishnan Pulapre, well-known economist and Director, Centre for Development Studies said that the Budget does not provide for increasing public investment even while emphasising that public investment is critical to driving growth.

V K Mathews, Chairman, CII Kerala State Council said the Budget does not offer anything to increase India’s competitiveness or to position it as an innovation hub. “Exports have also been consistently discouraged. The Budget does not do anything to promote exports. Most of the growth is concentrated in the seven metros of the country. No incentives have been provided to companies for expanding their operations to tier 1 and 2 cities.”

Even though Nasscom has predicted a growth of 12-14% for next year, the IT growth will not be the same as before and the industry will not see any non-linear growth. The increase in royalty from 10 to 25 per cent in IT sector will make IT more expensive in India since majority of software used is imported, added Mathews, also the founder and CMD of the Technopark, Trivandrum based IBS Software.

Dr. Anuradha Balaram, Chief Economic Adviser & Director, Project Financing Cell, Kerala State Planning Board said that the Union Finance Minister Shri P Chidambaram has tried to make the best out of a bad situation.

G Vijaya Raghavan, Member, Kerala State Planning Board and Member Secretary, ASB who also moderated the panel discussion said that Kerala has the highest number of people looking for Government jobs.

Earlier, laying the ground for discussions, Sachin Menon, Partner, KPMG made a review of the Indian economy. KPMG Directors Ajay Rotti and Sreenath S made detailed expositions on the direct and indirect tax proposals in the Union Budget respectively.

Kerala IT News

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