Budget 2010: All izz Well…!

Since the Budget 2010 was presented in the backdrop of slowdown in the economy and the uncertainties surrounding its recovery, it was only to be expected that there will be loads of expectations. Added to this, inflation is hanging like a Democle’s sword. However, given the circumstances, the Union Finance Minister, Shri Pranab Mukherjee, must be complimented for managing a deft balancing act.

The industry bodies, in general, expressed satisfaction at the thrust given to infrastructure development, enlistment of the rural economy and a significant outlay for the promotion of the social sector, especially education and healthcare.

For the IT industry, the best news has been the special additional duties, where the companies were first paying and then claiming them back. The process has now been scrapped. In the packaged software area, earlier we used to have double taxation. Now, only a one-time tax will be charged which is a welcome move. Surcharge has been reduced from 10 per cent to 7.5 per cent, which means the rate of direct tax will come down and this will give companies the resilience to absorb some of the not-so-good aspects of the Budget. This includes countervailing duties and fuel prices which have been increased, hiking the freight rate, but the drop in surcharge will give companies some cushion without passing on the burden to consumers.

This year may well turn out to be the turning point where cloud computing goes from buzzword to business. Since there is lack of industry standards to connect various cloud platforms, both public and private, an apprehension remains about moving to the cloud. Due to the non-existence of inter-structure standards, companies desirous of adopting various cloud offerings will have to face significant integration challenges. While contemplating moving to the cloud, security of data is a major issue that can be softpedalled by the companies only at their own peril. So in order to make cloud to be more viable, it becomes incumbent upon the industry to address these shortcomings. With IT budgets remaining flat, enterprises are scrutinizing those budgets more minutely to shift costs from maintaining infrastructure strategic IT investments aimed at growing sales.

Reverting to the Budget, it can be said that, overall, it is a forward-looking Budget and set in the right direction. We must say very loudly: All is well!