Benefit for domestic IT companies
Domestic IT companies are hopefully going to find interest in the few proposals that have been outlined in the Budget. The proposals include the set up of an eBiz platform which would likely benefit the companies as all investment and business clearances will be available on a single portal, along with a payment gateway.
The central government ministries and departments are expected to upgrade their services with this particular platform. Some of the other proposal includes upgrading the system of e-governance, IT trainings made available in rural schools and also revival of special economic zones. The frontline IT companies gain 3-5 percent income from domestic business and CMC derives 3 percent of its income from Indian clients which includes many government agencies.
The significant player in e-governance is Infosys as they manage the internet portal of Ministry of Corporate Affairs and also handle company electronic files. The newly proposed eBiz platform is likely to go live by December 2014. Companies like CMC and Wipro Infotech who handle e-governance and have also won multi-year deals are going to benefit from this prospect.
However taking into consideration that IT sector is one of the most profitable sectors in the country, the government will not offer tax incentives to them.
Source: The Hindu Business Line
