Expert Zone

Straight from the Specialists

Budget 2012: IT sector expects tax measures

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(The views expressed in this column are the authors’ own and do not represent those of Reuters)

The technology sector is set to cross the $100 billion mark this year with $69 billion from exports and $32 billion from the domestic market. This is a healthy increase of around 16 pct over last year’s growth despite global economic events such as the anti-outsourcing bill in the U.S. and the euro zone crisis which had an impact on the sector.

It is anticipated that going forward, these global events will have a significant adverse impact on the Indian technology sector coupled with a number of measures taken by other developing countries to get more of outsourcing business.

Additionally, the Indian technology sector is reeling under the pressure of higher wage bills, high attrition, linear growth (direct link between sales growth and headcount addition), skyrocketing real estate prices, uncertainties surrounding SEZs, the write-off of large technology contracts due to cancellation of 2G licences by the Supreme Court.

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