Policy Matters

IT competitiveness retention in Indian Budget

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National trade body Nasscom says the government has made good by fulfilling most of its pre-budget demands, but industry watchers and players are divided on whether the new budget is adequate. India's finance minister Pranab Mukherjee, unveiled the country's budget in Parliament on Monday, which aims to revive economic growth back to 9%, from 6.7 % between 2008 and 2009. To achieve this target, Mukherjee focused on lower taxes, higher personal income-tax exemption limits and the abolition of some taxes. These measures are expected to increase disposable incomes, thereby, spurring higher consumption. Nasscom has welcomed the budget.

The finance minister noted that the first set of unique identity numbers will be rolled out in 12 to 18 months. These numbers will be issued by the Unique Identification Authority of India (UIDAI), headed by Nandan Nilekani, co-founder of Infosys. The finance minister has proposed a provision of INR 1.2 billion (US$25 million) for this project. The finance minister also increased the allocation for the 'Mission in Education through ICT' scheme to INR 9 billion (US$188 million). He also took several steps for skills enhancement, increasing provisions for the setting up and upgrading of polytechnics under the Skill Development Mission to INR 4.95 billion (US$103 million). The government also allocated INR 21.13 billion (US$439.7 million) for Indian Institutes of Technology (IITs) and National Institutes of Technology, and proposed more funds for higher education. Iyengar, however, had wanted the budget to include efforts to revamp primary education.

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