 "Budget 2007: Satish Pendse, CIO, Hindustan Construction Company")
Finance Minister increased allocations to education. This is a positive step for IT and ITES industries from long term perspective. The industry is facing acute shortage of trained manpower and India is losing its competitive advantage to other Asian countries due to this reason. The shortage is likely to reach greater severity in the medium term. Ironically, this is happening in a country having high population as well as high unemployment. Government is doing right things by focusing on education so that the youth will get an opportunity to participate in the boom of IT & ITES and the industry too will benefit.
This is however a long term step and sustained efforts are required for a few years (or may be a decade) for the fruits to be realized.
The question also remains regarding the low percentage of “allocated funds” reaching the intended purpose.
The Finance Minister has brought IT industry under the MAT provisions wherein they will now have to pay taxes on their profits. From a broader perspective, this is the right step. IT organizations enjoy high profitability and the industry has also matured by now. Industry should therefore be in a position to contribute to the national exchequer.