Converging on Budget 2001-2002

The Financial Express,

(Comments from eminent CEOs and Corporate Heads on Budget 2001-02)

Dinesh Agarwal

Founder and CEO, Indiamart Intermesh Ltd.

Overall Budget is quite a balanced one, projecting the ‘opened-up’ approach of the government. It is quite a relief that e-commerce hasn’t been taxed which would have been an additional burden, making the high-potential e-economy more convoluted.

However, with each positive declaration, there is a string attached when it comes to the budget’s implications on businesses, especially in the IT services segment. For example, it is quite encouraging for the industry that the income-tax holiday has been extended for another five years, but at the same time, service tax has been levied on IT enabled services. Similarly, the benefit of Removal of Corporate surcharge has come at the cost of Tax on Internet & lease-line holders, and online information and database retrieval services. Such pull-backs will only hinder the growth of the industry, killing the advantage Indian skilled manpower and entrepreneurship has in today’s competitive global business scenario in the IT industry.