'Easier repatriation, increased infrastructure spending could help FDI inflows'

Sai Sreekanth

As far as gains for the IT companies are concerned, the software industry did not have lot of demands. Indian companies can now invest upto $100 million per annum through the automatic route. This is enhanced from the present $50 million per annum. Not going to make an impact as the current limit itself was not used. Customs duties on a number of hardware components have been reduced to 5 per cent to 15 per cent.

In addition, the general abolition of dividend distribution tax for the companies might have a marginal impact on the bottomlines.

I do not see anything for semiconductor industry in particular in this Budget. Hardware component import duties have been reduced and this should help.

Infrastructure spending is being increased and should benefit the telecom sector. Import duties on hardware components have been reduced. This should benefit the telecom and IT sectors. Cellphone duties have been reduced. This should benefit the telecom sector. FII limits have been detached from FDI sectoral limits except for some sectors. Need to see if telecom is in the sector list.

The IT industry giants are always spared from the tax devil even though they are earning thousands of crores. The government invited them through red carpet, but the same governments killed our own small scale industries.

There is a definite plan to include this industry in the tax net in a phased manner. We must remember that this is one industry where we are competitive in a global scale and opportunities are immense. The government needs to support this industry to enable us to realise our potential.

All the scrips in the Sensex have collapsed and not just the tech stocks. The market is reacting to the lower than expected interest rate cuts, high fiscal deficit, Gujarat incidents etc. There was nothing much expected from the Budget by the IT services sector.

As far as what telecom got in the Budget, I am more or less satisfied. The allocation for telecom sector (BSNL, MTNL) has increased marginally by about Rs 5 billion. Cellphone duties have been reduced to about 10 per cent. They should become more affordable. Increased infrastructure spending should result in increased telecom spending as well. Hardware components import duties reduction should help as well

Import duties on hardware components being reduced could bring down cost of some electronics goods. Lower duties on cellphones and pagers should also bring their prices down

As far as benefits for the working class is concerned, there is nothing much I'm afraid. Computer hardware prices could come down due to to the reduction in the import duties for hardware components.

PC prices could come down due to the reduction in the import duties for hardware components.

The Budget has made it easier to invest in foreign companies, but this does not benefit many companies. The ensuing quarter should see flat growth compared to the last quarter.

The Budget is a difficult one for the middle class. LPG increase, rail fare increase, IT surcharge, reduction in tax rebate are not much good news.

The stock market seems to have had high expectations and IT stocks are the favourite punching bags. Companies can now invest about $100 million in foreign companies automatically

PC prices maybe slashed down in the next one month. The telephone rentals are not decided in the Budget. However this will happen in the long run. Currently, long distance rates subsidise local calls and these will be slowly changed.

The telecom department does not have a big share in the Budget. It was about 189 billion according to the revised estimates and in this budget it will be about 194 billion.

The IT industry will recover. The recovery is not related to the Budget and I am glad about it.

It's difficult to say whether the Budget will boost FDI inflows into India. Easier repatriation norms and increased infrastructure spending could help FDI inflows

Sai Sreekanth is CTO, Axcend VC

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