Nasscom president Kiran Karnik is widely quoted this week as saying that IT companies will be hit hard if the rupee continues to rise over the next five years. These are genuine concerns. But it is disappointing to note that the technology industry body is fishing for tax breaks to protect itself.
Our software companies are known for being smart and competitive. They earn margins far in excess of what companies in other industries earn. They continue to add to their labour force. Surely they can adjust to a rising rupee, which anyway is partly a result of the billions the software and BPO companies earn from exports.
There is no doubt that various tax breaks did help the software industry in its infancy. But that is the past. An industry that is expected to have $60 billion of exports in 2010 no longer needs tax crutches to compete.