Job creation potential in IT underscored

The information technology industry, the showpiece of the Indian economy, is unanimously happy that very little tinkering has been done in the Budget as far as it is concerned.

But opinion is divided on the imposition of a 4 per cent countervailing duty on IT hardware imports. The industry is univocal that the impetus to the growth of jobs will have a good impact on the sector and is viewing this Budget as a logical continuation of Budgets over the last decade as far as the IT/ITeS industry is concerned.

IT firms are also happy at the importance given to infrastructure development.

Most of them identify with the statement by the finance minister that seven million jobs will be created by the IT sector by 2009 and the government will continue to aid employment-creating sectors.

The announcement of a countervailing duty of 4 per cent on the import of IT goods has been received warmly by local hardware players who believe that the move ensures a level playing field between local manufacturers and imports.

But others in the industry feel that the step puts a break on dropping hardware prices which is must to ensure penetration of technology among the masses.

Noted Manoj Chugh, president, EMC India & SAARC: "Budget 2005 has all the ingredients for growing the domestic IT market five times faster than the percentage of global IT spending. The government's focus on development of infrastructure and rationalisation of customs duties is a positive step to stimulate domestic demand."

Added Rangu Salgame, president, Cisco Systems (India & SAARC): "The government's decision to hike teledensity across all villages by 2007 will positively impact connectivity, helping rural Indians to be a part of the digital revolution. The revision in duties, particularly customs duty exemption, is likely to be welcomed by company CIOs, who are aggressively increasing their IT budgets this year to make them globally competitive."

Industry leaders also welcomed equity support to IT companies and felt that the duty relief on electronic and software imports will encourage fresh investments to build additional capacities.

But their one regret was that Chidambaram did not provided a booster for broadband internet services.