Minu SirsalewalaFeb 28, 2007 16:21:36 IST
The Budget presented today is rated as 'positive' overall for the economy and 'neutral' for the IT sector. It is also a big step in moving towards a more developed economy in that the budget should not have a HUGE impact on the overall economy of a country. In developed economies budgets are almost non-events for the mass public. Though we're not there yet, having a budget that doesn't change the fortunes of entire industry segments is actually a good thing, for the long term.
The emphasis on health and education is also a strong positive, since, in the long term, being able to adequately improve the larger rural masses will be key to India's continued development. Even from a tactical perspective, an improvement in the education availability, especially at the secondary level, in semi-urban and rural areas will benefit the Indian IT industry, as it expands out into Tier 2 and Tier 3 towns and cities.
The two minor irritants for the IT industry, the MAT and ESOPs coming under the FBT are also not major industry wreckers (as the stock markets seem to have interpreted them!). They are a minor turbulence for an industry that is growing rapidly, is reaching some level of maturity and is not going to be affected in the medium to long term by blips like these. In fact, one can argue that the MAT route is a good way to start getting the IT industry closer into the tax regime, which, even some leading IT industry CEOs have been pitching for.
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