Jul. 2, 2009 (The Hindu Business Line) --
Information and communication technology is a key enabler in the development of India.
The Government has a historic opportunity to truly empower India with an IT status and consolidate economic gains of recent years and accelerate the country’s growth. Some of the recommendations for key areas are:
• The software industry requires clarity on taxation which is applicable to software. Various modes of delivery of software and licences lead to confusion on the exact taxes to be levied. The taxation authorities end up levying excise duty/CVD as well as services tax. There must be clarity and consistency on tax applicable for software. Classifying all types of software as a service may be a good way to achieve that.
• Tangible incentives/benefits should be provided to SMBs to help them upgrade their IT infrastructure. For instance, IT software solutions should be included in incentives available to SMBs in schemes such as those offered by the Ministry of Micro, Small and Medium Enterprises for technology upgradation (Credit Linked Capital Subsidy Scheme).
• An IT literate workforce is critical to increase productivity and keep labour costs low. Some immediate steps could include encouraging telecom operators such as BSNL to offer an affordable ‘Education PC’ at less than Rs 500 a month which includes a laptop, broadband and educational software and application services; 100 per cent depreciation on capital investment in IT by companies; income-tax rebates to individuals for acquisition of computers once in 3 years subject to a limit of Rs 50,000 and up to Rs 1,000 a month and deduction from taxable income for broadband access will encourage the use of broadband in low penetration sections of the economy.
• Increasing outlays for mission mode projects under the National e-Governance Plan and incentives to State Governments.
• Use of IT in societal projects such as NREGS and National Rural Health Mission would make the service delivery efficient, effective and more accountable/transparent; may be 5 per cent of money for such schemes should be earmarked for IT to ensure the end-delivery is significantly improved.
Rajan Anandan, Managing Director, Microsoft (NASDAQ:MSFT) India
