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Needed: A Long-Term View

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Economic uncertainties in the past year have exposed India Inc. to financial and economic vulnerabilities. The year 2011 witnessed Inflationary pressures and rupee devaluation that have affected IT spending across consumers and the corporate sector. The Union Budget 2012-13 brings with itself a hope of a better tomorrow.

Recovering from the past downturns, 2011 was a relatively stable year for the IT industry. For India Inc. to be able to rise and flourish, it is important that the Budget, as a statement of intent, expresses the long-term proposal for the economic stability of the country. To ensure continued development and growth, a few reforms are majorly expected out of this year's Union Budget.

Firstly with the GST that is likely to find a mention in this year's budget and would probably be implemented from April, withdrawal of MRP based assessment for IT products is absolutely necessary as this will not only benefit manufacturers and IT channel partners but also ensure reduced prices of products for the end consumer. The implementation of the biggest direct tax reform – GST is a critical growth lever for the IT industry and we are hopeful that it will find a mention in this year's budget. This would phase out other major taxes like excise duty, VAT, service tax and will be instrumental in unifying the markets in term of local taxation, which in turn, will bring down overall cost of goods and services in the country. GST would also assist IT manufacturers to maintain uniform prices across the length and breadth of the country.Distribution of products would also be majorly benefitted by the implementation of GST.

Foreign Direct Investment (FDI) in retail is another important economic reform that the IT industry in India looks forward to with great hope. FDI would help strengthen India's supply chain and also benefit end consumer in terms of ensuring lower product price. Finally, we need radical reforms in the taxation and duties space, which the industry today yearns for. At present, certain areas still attract duties close to 10% which inflate costs and lead to either price hikes for consumer or reduction in profit margins for the manufacturer and channel partner.

Belkin India, since its inception in early 2009 has successfully been able to cement its position as a leading solution provider across its wide range of products. Present across seven major categories including Networking, Mobility and structured cabling Belkin India has been witness to large scale overall economic growth and development in the IT industry. GST is an important driver of Belkin's future plans in India.

As the Budget day comes closer, everybody starting from India's common man to the big business houses await maximum fiscal benefit. Everyone expects an action-orientated and policy-setting scheme that would help India Inc. rise and strengthen its economic base. With forward looking policy announcements & structural corrections, the 2012 budget could be a great opportunity window to inject both sentiments & substance to growth renewal.

(The author is MD Belkin India Sub-continent)