The problem with the last budget of any elected government is the widespread expectation that this would be a populist one aimed at the vote banks rather than addressing the real issues of growth and stability that a rapidly growing economy needs. But with the economy on a continuing growth track and opportunities to establish global leadership in many sectors, there is reason to hope that this Budget can set directions for sustenance and growth.
Three important announcements that one expects from this Budget are a definite reduction in taxes at all levels, a continuity of the wise policies that have put the IT (information technology) and BPO (business process outsourcing) services on the path to global leadership and significant focus on research and education. The software and BPO exports companies, which gave the confidence to Indian entrepreneurs and the world at large that “delivered from India” could be a truly world-class proposition, need an extension of the STPI (Software Technology Park of India) scheme to give thousands of entrepreneurs the confidence and capability to fight against larger competitors and emerging global destinations such as China, Vietnam and eastern Europe. Enabling policies in the form of tax exemption for input services to the export sector and rationalization of FBT (fringe benefit tax) on Esops (employee stock option plans), which are so necessary to unleash the innovation that drives the knowledge industry, are needed to sustain the momentum of this industry.
Inclusive growth and spreading of economic prosperity to all sections of society needs investments in capacity building in all parts of the nation. Tier-3 and tier-4 towns can join the party only if significant private partnerships emerge to provide uniform quality of vocational training and if the private sector is encouraged to build small resource pools at these locations to augment the capacity availability in the key cities. Both these need outlays of development budgets and policy pronouncements. This will also help fast growing domestic industries, such as retail and aviation, which are suffering as much from the lack of trained manpower as the IT sector. Significant outlays for research to double quality PhD output in the next year would also create a base for future innovations in science and technology that hold great promise for building new industries and capabilities in the country.
The wisdom of the finance minister is unquestionable and there are few budgets under his stewardship which have disappointed the discerning, but one would hope that the resources of the country are harnessed this year not just to serve short-term political objectives, but also for the commencement of sweeping development initiatives that will secure the long-term place for India among the economic leaders of the world.
(Ganesh Natarajan is vice-chairman, National Association of Software and Services Companies, and deputy chairman and managing director, Zensar Technologies Ltd.)
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