Indian IT steps beyond sops, tax incentives

The Indian information technology (IT) industry with a size in excess of over $100 billion is now at a stage where mere tax incentives or sops would not actually spur the sector. Instead broad policy initiatives in the forthcoming Union Budget in addressing issues like infrastructure, e-governance or health will have a longer term bearing on the sector.

The IT industry in India which grew very rapidly over the last two decades given its inherent strengths of cost competitiveness with a large technical talent pool, not to forget the favourable tax regime, is now at a crossroads as the changed economic scenario has called for new business models to meet different kinds of demand.

Partha Iyengar, country manager —Research, India, Gartner, said, “The IT industry has reached a tipping point in terms of scale and maturity today, where the issues it is grappling with as the next impediment to growth do not have much to do with granular industry level issues like taxation, ‘sops’ etc. The issues that will enable or inhibit the next level of growth for the industry have to do with fundamental issues like infrastructure improvement, education, skills development, streamlined

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