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BW Businessworld

'IT Needs Govt To Focus On The Fundamentals'

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The IT industry has reached a certain level of maturity, having been through tough times and has now reached a point where it needs to elevate itself to another new level to capitalise on emerging trends around the globe – both from a technology and business perspective.

For this to happen, it needs to focus on a few fundamental areas to enable this in the long run. To start with, there needs to be more focus on skill development in the country overall. Increased investment and support to the National Skill Development Council and vocational education will be most welcome on this front.

The domestic IT industry needs to also develop at an accelerated pace. On this front, there needs to be increased spend on e-governance initiatives and implementations on a larger scale. Adoption of technology in government services will have many more benefits in addition to bolstering domestic spend.

The future of the IT industry also depends upon creating a more supportive environment for Small and Medium Enterprises (SMEs) to bolster innovation and adoption of newer business models. In this regard, extending the STPI scheme for a longer term, say 5 years, will bring in more stability. This should also serve as an opportunity to revisit some of the tax decisions the Government took in the last couple of years and repeal the ones which were significantly boosting SME growth.

Last but not the least, there is also a need to have more clarity and simplicity around some core areas like taxation of software and transfer pricing. Instituting an independent panel and removing ambiguity around dealing with issues like Transfer pricing will be greatly beneficial to the industry. This move should also help SMEs and it’s only fair that are not painted with the same brush as the larger players.

While a lot of good things have been initiated, it’s an opportune time for investing a little more focus on a few core areas, getting to a more transparent and simpler business environment and fine-tuning a few old taxes. All of these will go a long way in ensuring that the IT Industry will get the much needed impetus to ascend to the next orbit in the coming years, amidst a hyper-competitive environment and a shaky economic scenario globally.


(Krishnamurthy R, Senior Vice President & Head of Global Delivery, Collabera)