The Hindu Business Line : MAT increase may hit Tier-II players

The Finance Minister has brightened the hearts of the captains of the IT industry by extending the tax holiday by a year, the abolition of fringe benefit tax and the removal of duty on packaged software. But he has taken the shine off by an increase in Minimum Alternative Tax (MAT) which will be felt by the Tier-II players.

Extension of the sunset clause only for a year is discouraging and the Government should consider extending the scheme to support industry, especially operating in Tier-2 and Tier-3 cities.

Also, considering the current global slump, I feel the Government should have announced more schemes to help small and medium-sized Indian IT companies to bid for projects in the domestic market.

Industry can take heart from the fact that the various projects and schemes announced by the Government will require an increased role of information technology, the UID project to name one.

Removal of surcharge on personal income is also a positive development as it will leave more money in the hands of employees.

Moving away from taxes and focusing on the intent (and the Budget should be seen more in the light of what the intent is rather than taxes and the benefits)

What really exciting about this Budget is ’Mission in Education through ICT’, and the proposal to upgrade polytechnics under the Skill Development Mission.

This scheme will help take IT benefits to the grassroots in a critical sector such as education.

I feel more should be done to provide an impetus to ICT in education and learning. Another exciting aspect is the Government’s huge focus on R&D.

I would term the intent as “inclusive and socially focused”.

The strong emphasis on sectors such as agriculture, infrastructure, education and rural development is the way to bridge the India-Bharat divide.

Vikas Singh, President, Crux Management Services Pvt. Ltd