8 things IT Inc wishes from UPA govt

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The new government at the centre has come as a ray of hope for the Indian IT sector. The industry, battling recession and protectionism in its biggest market, is hoping for a renewed thrust towards the sector by a stronger, reform-oriented government.

The software services and outsourcing industry expects the UPA government to increase spending on IT initiatives, education and infrastructure.

Here are the eight things that Indian IT Inc wants from the new government at the centre.

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Extension of STPI benefits

Specific policy initiatives to sustain industry's growth through extension of tax benefits, particularly for SMEs; removal of inequities and multiplicity of taxes on issues like FBT, Service Tax and overall uniform policy environment to enhance India's competitiveness and attract foreign investment.

Nasscom has been seeking extension of software revenue tax benefits for a few more years. The benefits, ending in March 2010, would hit the earnings of companies, with the tax outgo raising.

In 2005, the government had imposed FBT, levying on prequisites provided to their employees. IT industry had opposed the move as they offer their employees a lot of such benefits.

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Boost IT spending

Develop public-private partnerships to accelerate implementation of the already-approved e-governance programmes and evolve appropriate new programmes; increase government IT budgets so as to provide a strong stimulus to the IT-BPO industry and to the economy.

From TCS, Wipro, Infosys to HCL, Patni and Cognizant, companies are now scrambling to raise their share in the domestic software and IT services pie, valued at Rs 58,000 crore. Their earnings from the domestic market have been less than 10%.

Additionally, government contracts have become more important because of their sheer size and long tenure besides being credible and financially stable.

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Implement unique ID card scheme

Partner with the industry to implement unique identity card for each citizen using IT, as mentioned in the manifestoe. The meltdown has forced many US, Europe and Japanese companies to pare their IT budgets, hitting Indian firms.

The industry hopes the government should leverage its capabilities to catalyse development programmes in education and healthcare for each citizen.

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Reform education system

Implement the nation-wide skill development programme and leverage IT expertise both for enabling education and imparting employable skills that can be deployed in the industry.

"The focus on including IT in education, e-Governance programmes, broadband, WiMax and 3G are some areas that the government should look into for promoting growth in the industry," MAIT Executive director Vinne Mehta said.

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Tough stand against growing protectionism in US

Leverage international relations and build perspectives with key developed nations for continued bilateral trade development with no deviations on protectionist moves through visas and taxation.

The new government comes at a time when the Obama administration in the US plans tax clampdown that could hurt Indian IT players. Nasscom Chairman Pramod Bhasin called for an overall uniform policy environment to enhance India's competitiveness and to attract foreign investment.

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Strengthen infrastructure

Continue and expand infrastructure development programs across the country and build integrated IT-BPO townships; provide fiscal incentives for

growth of the IT-BPO industry in Tier-2 and -3 towns.

Develop nationwide security programme

Develop and implement a comprehensive nation-wide security programme as one of the top three priorities of the government.

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Extend broadband to grassroot level

Initiate a time-bound programme for extending broadband to all villages as mentioned in the Congress manifesto, so as to provide Internet access to all citizens; back this up with steps to increase computer penetration.

Bhasin said the new government should also lay stress on computer penetration and on internet access for masses. "The government should initiate time-bound programmes for extending broadband to all villages as mentioned in the Congress manifesto, so as to provide internet access to all citizens, and back this up with steps to increase computer penetration," he said.

source:indiatimes