IT sector disappointed over budget

Mumbai, Feb 29: The IT sector has expressed disappointment over the Union budget for 2008-09, presented by finance Minister P Chidambaram today, and said barring some small indirect positives, the budget was a lacklustre one.

The IT industry expected Mr Chidambaram to extend the STPI scheme and also to rationalize the fees, taxes and duties applicable on the telecom sector, but this was not even touched upon by him. ''From IT and Telecom Industry point of view, apart from few small indirect positives, it was a lacklustre budget'' was the reaction from Consultancy firm Frost and Sullivan.

On the positive side, the sector expected the increased allocation of 20 per cent to the education sector to see investments in IT hardware and telecom network. Similarly, on the Banking financial inclusion scheme of 250 rural household accounts per rural and semi urban branch would drive Banks and RRBs to look for IT and telecom solutions and lead to a huge IT spend in the long run, the consultancy firm added.

On Excise on packaged software being increased from 8 to 12 per cent and Service tax on Customised Software, it said that the move would have an impact on the Sector as the prices of software for both the masses as well as enterprises would increase.

UNI